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CSR Report2005

ASAHI GLASS CO., LTD. CSR Report 2005

CSR Report Editorial Policy .....................................................................................................1

CEO Interview: Leads to Better Fulfillment of CSR .......................................2

Bright Focus on Sustainability

1 Establishing the Project Team to Define AGC Group's Policy for CSR............................................6

2 Reduces Environmental Impact Over the Life Cycle:Asahi Glass's High-Performance Glass Products...................................................................10

3 Tackling Reductions in Fluorocarbons Emissions for Ten Years.................................................12

4 Aiming at a Win-Win Relationships with Customers and Suppliers by Establishing Green Purchasing Guidelines for Automotive Glazing .............................................14

Innovation & Operational Excellence

AGC Group Profile.........................................................................................................16

Investor Relations .........................................................................................................17

Customer Satisfaction (CS) and Quality Improvement .............................................................18

Diversity

Employee Satisfaction (ES): Employee Job Satisfaction and Pride in Accomplishment.....................20

Integrity

Compliance.................................................................................................................23

Environment

Global Environment

AGC Group Environmental Policy and Promotion Structure ......................................................27

Fiscal 2004 Plans, Results and Evaluation and Fiscal 2005 Plans .............................................28

Relationship Between Asahi Glass Business Activities and the Environment .................................30

Environmental Management System..................................................................................31

Eco-Friendly Products and R&D........................................................................................32

Global Warming Countermeasures and Prevention of Air and Water Pollution ...............................36

Waste Reduction ..........................................................................................................38

Investigating Soil and Groundwater and Preventing Pollution....................................................40

Proper Management of Chemical Substances ......................................................................41

Reducing the Environmental Impact in Logistics ...................................................................42

Green Procurement and Green Purchasing..........................................................................43

Environmental Accounting ..............................................................................................44

Environmental Communications .......................................................................................46

Environmental Activities at Overseas Sites ..........................................................................47

Social Environment

Industrial Safety & Security .............................................................................................51

Occupational Health and Safety (OH&S) Activities..................................................................52

Social Contribution Activities............................................................................................54

The Asahi Glass Foundation ............................................................................................55

GRI Content Index (2002) ..................................................................................................56

Observer’s Opinion ..........................................................................................................57

CSR Report Editorial Policy

CSR Report 2005 1

CSR Report Editorial Policy

This is the first CSR Report on corporate social responsibility(CSR) activit ies engaged in by the AGC (Asahi GlassCompany) Group since we published our EnvironmentalReport in 2000 and subsequently changed the name toSustainability Report.

This report was prepared based on the concept of OurShared Values of the AGC Group Vision “Look Beyond.” Toencourage as many stakeholders as possible to read thisreport, we introduce the Group’s policy and major CSRactivities in an easy-to-understand way on the Bright Focus onSustainability page. In wanting to respect the opinions of our

stakeholders outside AGC as well, we have included aninterview between Mr. Toshihiko Goto, Chair, EnvironmentalAuditing Research Group and Masahiro Kadomatsu, AsahiGlass President and CEO as the front-page feature article,while you will find an observer’s opinion from the ValdezSociety at the end of the report.

We would be most grateful if you could provide your opinionsand other feedback to us.

Our First CSR Report Published in Fiscal 2005

[Scope of reporting]This report covers the CSR activities of the AGC (Asahi Glass Company)Group in fiscal 2004 (from January to December 2004). The report alsomentions some important activities from fiscal 2005. In the text, “Asahi Glass” generally refers to the parent company, AsahiGlass Co., Ltd.

[Reference publications/guidelines]Sustainability Reporting Guidelines 2002, Global Reporting Initiative

Environmental Reporting Guidelines (2003), Japanese Ministry ofEnvironment

● Future perspectives described in this report are based on theinformation available to Asahi Glass during the preparation ofthis report. Nevertheless, results and consequences may varywith fluctuations in the business environment. We ask for theunderstanding of our stakeholders in this.

● Unauthorized reprinting or duplication of this report isprohibited.

● All rights reserved. 2005 Asahi Glass Co., Ltd.

● is registered by Asahi Glass in Japan.

[About the AGC Group CSR Book]

We published the AGC Group CSR Book, aiming at promotingstakeholder awareness of the AGC Group’s ideas for CSR. It containsthe Group’s commitment as described by CEO Kadomatsu, as well asmessages to the AGC Group from Independent Directors. We hope youwill also take a look at the AGC Group CSR Book along with the CSRReport and Annual Report. All of these publications can be downloadedfrom the Asahi Glass official website by entering the relevant URLs.

AGC Group CSR Book CSR Report Annual Report

■ Asahi Glass websiteURL http://www.agc.co.jp/english/

■ Asahi Glass website (Environment section)For inquiries about the AGC Group CSR Book and CSR ReportURL http://www.agc.co.jp/english/environment/

■ Asahi Glass website (Investor Relations section)For inquiries about the Annual ReportURL http://www.agc.co.jp/english/ir/

Cover: 21st Century Museum of Contemporary Art, Kanazawa

CEO Interview

CSR Report 20052

Goto: Could you tell me what the AGC Group, which iscentered around Asahi Glass, basically thinks aboutCSR?

Kadomatsu: Companies are now required to developtheir business while becoming more involved with societyin various aspects. In addition to promoting business in anenvironmentally friendly manner, they are also expected todisclose corporate information, establish corporate ethics,and make social contributions. Briefly, CSR is an integralelement of business activities: without incorporating thiselement into its activities, no company will be able to winthe trust of society and grow itself in a sustainablemanner.However, I am not passive in regard to these changes inour business environment. Rather, I see them as anopportunity for a company to make progress in societyand to become a more valuable asset for society in

general. CSR usual ly stands for corporate social“responsibility.” I, however, interpret CSR as corporatesocial “rel iabi l i ty.” We must make proactive andcomprehensive efforts to be more socially reliable, ratherthan merely passively fulfi l l ing our corporate socialresponsibility.

Goto: Recently, some English-Japanese dictionarieslist a translation that interprets “responsibility” as“reliability,” and I totally agree with you regardingCSR. What measures has the AGC Group taken to winthe trust of society?

Kadomatsu: We have embodied our concept of CSR inour Group Vision “Look Beyond” established in 2002, andin Our Shared Values stated in this Vision. All employeesof the AGC Group need to share these Values as the basisfor all their actions. Specifically, we have four Our SharedValues: “Innovation & Operational Excellence”; “Diversity”;“Environment”; and “Integrity.”“Innovation & Operational Excellence” represents ourcommitment to the pursuit of innovation in technology,products, and services, and to our constant search foroptimal efficiency and quality. This is indeed the basicprinciple of Asahi Glass, upon which the company wasfounded: “Never take the easy way out—address thedifficulties.” This value is one source of the AGC Group’scompetitive advantage.“Diversity” is indispensable for the AGC Group to continueits growth to become a truly global enterprise. We are

We must make proactive efforts, interpreting CSR as corporate corporate social “responsibility.”

President & CEO

Masahiro Kadomatsu

committed to fair human resource management throughadopting measures such as placing the right people in theright jobs, without prejudice against their nationality,gender, or background, while also respecting the culturaldiversity in race and ethnicity. Through “Environment,” weaim to contribute to developing a sustainable society byconsistently promoting environmental activities and theoccupational health and safety of our employees. Finally,“Integrity” demonstrates our attitude to form open and fairrelationships with every stakeholder with society at large,not to mention our customers and employees. Forcompliance, which is one element of integrity, we aretrying to set high social and ethical standards, not simplyto comply with the law.I believe that we can make the world a brighter place ifemployees of the AGC Group vigilantly practice the GroupVision “Look Beyond” in all their activities.

Goto: What measures are you implementing atworkplaces to back up “Our Shared Values” withexperience and increase their depth?

Kadomatsu: Concurrently with taking office as President& CEO in April 2004, I started a new management policywe cal l , “JIKKO”—Execution for Excel lence. Ourcommitment to managerial reform made under theprevious management policy, “Shrink to Grow,” led to the

● Interviewer●

Chair, Environmental Auditing Research Group

Toshihiko Goto

CSR Report 2005 3

CEO Interview

Leads to Better Fulfillment of CSR

The AGC Group is committed to its Group Vision and making efforts to attain thisvision in its daily operations. aims to “make the world a brighter place” through theconcerted effort of its 57,000 employees all over the world. We are improving CSRthrough , and are contributing to the sustainable development of society in cooperationwith many people, aiming to be consistently respected and trusted by society at large.In this report, Masahiro Kadomatsu, CEO of the AGC Group, describes the challenges that the Group istaking on in an interview with Toshihiko Goto, Chair of the Environmental Auditing Research Group.

Chair, Environmental Auditing Research GroupMember BoD, Global Reporting InitiativeCo-chair, Network for Sustainability Communication Judge, Environmental Communication Award Mr. Goto also teaches the environmental management atseveral universities as an adjunct professor.

social “reliability,” not simply as

CEO Interview

CSR Report 20054

development of our Group Vision “Look Beyond” for theAGC Group, and the policy “JIKKO” has been newlyformulated to achieve this vision. Subsequently, in January2005, we announced a new medium-term managementplan “JIKKO-2007” as a specific plan to implement“JIKKO”.For everyone to make concerted efforts for “JIKKO,” topmanagement and employees need to discuss the issuestime and again. Last year, to this end, I visited 12 plantsduring my six overseas business trips, as well as 15 sitesin Japan, to explain the “JIKKO” and encourageemployees to re-recognize the significance of GroupVision “Look Beyond”. I asked them what “Innovation &Operational Excellence” and “Diversity” meant to them,because I wanted them to implement “Our Shared Values”in their daily business operations.In 2005, based on the re-recognition of our basic stance, Iasked the presidents of four In-house Companies and theHeads of the six Strategic Business Units (SBUs) toincorporate the “Our Shared Values” into their businessmissions. Specifically, we have introduced a mechanismwhereby the Group Corporate management can regularlyevaluate the progress of each In-house Company andSBU based on key performance indicators (KPIs) set outfor their business activities. The KPIs are numerical targetsthat represent the commitment made by each of the In-house Companies and SBUs to the Group’s topmanagement. The In-house Companies and SBUs canpresent detailed missions to their individual employeesbased on these KPIs.I think it very important to ensure that the Plan-Do-Check-Act (PDCA) cycles are functioning properly and establish a

commitment to CSR as an integral part of our mission inbusiness management. Focusing our efforts onimplementing Group Vision “Look Beyond” will directlylead to the better fulfillment of CSR by the AGC Group.

Goto: It is also important to communicate your effortsto society at large and receive frank opinions from thepublic, isn’t it?

Kadomatsu: Under the management policy “JIKKO”, wealso aim to win more trust from customers by furtherimproving customer satisfaction (CS). For example, weregularly conduct questionnaire surveys on customersatisfaction to obtain their opinions on our activities, aswell as to help them deepen their understanding of ourdirection. Also, in order to raise public awareness of theGroup, we started to broadcast TV commercials inSeptember 2004 for the first time in six years. The AGCGroup is mainly engaged in B-to-B business and thereforewe have difficulties in communicating what kind ofcompany we are to end users. As a prerequisite for us tobetter fulfill CSR and become an enterprise trusted widelyby society at large, including our customers and businesspartners, we first of all need to make more people awareof the activities of the AGC Group. I hope that as manypeople as possible will read this report to deepen theirawareness of the AGC Group. We formed a CSRcommittee in April 2005, thereby establishing a CSRmanagement system covering all the Group companies.We will further promote interactive communicationsbetween the AGC Group and society and make continualimprovements to our CSR activities.

Establishing Commitment to CSR and Deepening Communication

CSR Report 2005 5

CEO Interview

AGC Group established its basic policy concerning thecorporate governance structure in order to strengthen itsoversight functions by clearly separating these frommanagement functions. Also, to promote speedy decision-making in the execution of business we clearly distinguishcorporate functions from business operations functions.Specifically, in June 2002, Asahi Glass reformed the structure ofits Board of Directors, positioning it as a body to approve basicpolicies and oversee the management of the AGC Group. Aspart of these reforms, the number of directors was reducedfrom 20 to 7, of which two were appointed from outside thecompany. (Fol lowing the March 2005 annual generalshareholders’ meeting, the number of outside directors wasincreased to three.) Also, their term of office was shortened toone year. At the same time, Asahi Glass introduced the so-called executive officer system, under which executive officers(with a one-year term of office) are clearly distinguished fromdirectors as defined in Japan’s Commercial Code, and theseofficers are responsible for the execution of the AGC Group’smanagement and business operations.In June 2003, Asahi Glass voluntarily established two boardcommittees: the Nominating Committee and the CompensationCommittee, in order to further strengthen its corporategovernance system by improving objectivity in the evaluation,

nomination, and remuneration of directors and executiveofficers.Further, Asahi Glass adopts the corporate auditor system,comprising four auditors, including two outside auditors. Theseauditors, according to the auditing policies determined by theBoard of Corporate Auditors, attend the meetings of the Boardof Directors and other important meetings, examine importantdocuments, audit the departments of the head office as well asother offices and plants, investigate subsidiaries, and report theresults to the Board of Corporate Auditors.For the management system, the In-house Company systemwas introduced in April 2002. With the introduction of thissystem, we changed our business operation system fromlocally-focused operations to a globally integrated managementsystem. Coinciding with these moves, each In-house Companyand SBU was entrusted with substantial responsibility andauthority for business operations.At Asahi Glass, business units that conduct business operationson a global scale and have net sales of roughly 200 billion yenare classified as In-house Companies. At present, we have fourIn-house Companies: the Flat Glass Company, the AutomotiveGlass Company, the Display Company, and the ChemicalsCompany. Business units of a smaller size than such In-houseCompanies are defined as Strategic Business Units (SBUs), ofwhich there are six at present.

Corporate Governance

with Society through

Members of BOD:7 directors

(including 3 outside directors)

4 In-houseCompanies

• Flat Glass Company• Automotive Glass Company• Display Company• Chemicals Company

6 SBUs

• Electronic Materials and Products SBU• Asahi Techno Glass SBU• Asahi Fiber Glass SBU• Asahi Glass Ceramics SBU• Ise Chemicals SBU• Optrex SBU

Corporate auditors: 4 auditors

Nominating CommitteeUp to 5 directors, of whom at least half are outside directors

(including 2 outside auditors)

Overseeing functions Management functions

In-house Company/SBU

Compensation Committee

President & CEO

Senior Executive Vice President & CTO

Senior Executive Vice President & CFO

Independent accountant

27 Executive Officers (Including 1 non-Japanese)

ComplianceCommittee

InternalAudit Office

Shareholders’ meeting

Up to 5 directors, of whom at least half are outside directors

C O L U M N

CSR Report 20056

Business entit ies, as members of society, shouldcontribute part of their profits to the communities theybelong to, while endeavoring to work with citizens towardsa sustainable society. In recent years, this idea is referredto as corporate social responsibility (CSR). CSR is becoming increasingly important against thebackground of the sense of crisis around the belief thatthe environment will deteriorate further if no changes aremade to present economic activities as well as intensifiedcriticism of companies that focus only on profit and ignoresocial standard. CSR basically aims at building good relationships with allkinds of stakeholders, gaining trust and a favorablereputation from society through enthusiastic efforts that gobeyond simply making a profit and paying taxes. Theseefforts extend to various areas, namely, compliance,environmental conservation, qual ity management,occupational health and safety, employee satisfaction,respect for human rights, fair competition, and socialcontribution.In other words, companies should be qualitativelyevaluated by society without taking into account theirfinancial situation, unlike in the past, when they were onlyevaluated quantitatively and financially. No matter howmuch profit is being made, companies cannot beaccepted by society if their businesses operate from anti-social, anti-humanitarian mechanisms and actions. Thereason for their existence is only appreciated after theyprove that they are engaged in trustworthy businessareas, and are contributing to sustainable development.

Under these circumstances, the AGC Group took up“Bolster corporate social responsibility (CSR) activities inAGC Group.” as a theme, viewing it as one of theimportant issues arising from their AGC ManagementPolicy, “JIKKO” – Execution for Excellence. “LookBeyond”, the AGC Group vision, represents our drive toanticipate and envision the future, have perspectivesbeyond our own f ields of expert ise and pursueinnovations, not becoming complacent with the statusquo.“Look Beyond” is comprised of the following: Our Mission,Our Shared Values, Our Objectives, and Our Principles.In structuring our ideas on CSR, the AGC Groupcompared its Group Vision with a variety of guidelines onCSR to convince ourselves that following the “Look

Verifying that the AGC Group Vision “Look Beyond” includes important CSR factors

CSR dictates that companies should buildtrust while assuming their corporateresponsibilities.

Beyond” will improve our CSR. We continue to tacklediverse issues based on the vision.First of all, following the Group CEO’s instructions, aproject team was established in August, 2004 to pursueCSR improvements as a priority initiative. This team wasto examine CSR from scratch, including what CSR for theAGC Group should be, or what concept we should have.The initiative team checked major CSR requirements toimprove CSR against four external standards andorganized them into 13 categories, which contain about

Establishing the Project Team to Define AGC Group’s Policy for CSR

Comparison between CSR external standards and the AGC Group Vision: “Look Beyond”

OurMission

External Guidelines on CSR

Corporate Governance

Compliance

Healthy FinancialStructure

Consideration forExternal Stakeholders

Consideration for theGlobal Environment

Participation in, Contributionto, and Development

of Local Communities

Consideration forthe Work Environment

Human ResourceManagement

Human Rights

Occupational Health and Safety/Crisis Management

Product Liability

Fair Transactions

Information Disclosure

DJSIDow Jones

Sustainability Index

GRI GuidelinesGlobal Reporting Initiative,SustainabilityReporting Guidelines

ManagementGuidelines

SIGMAGuidelines

Principlesand

Codes

UNGCUnited NationsGlobal Compact

* The external guidelines are chosen on a global basis.

* Source: Final Report for the Research on International Comparison of Major Standards concerning Corporate Social Responsibility, Business Ethics and Compliance Research Center, Reitaku University (2003).

13 categories; 70 groups; 300 factors

Comparative Analysis

Categories*

Selectio

n and C

lassification

Socially Responsible Investment

Indexes

ReportingGuidelines

CSR Report 2005 7

B r i g h t F o c u s o n S u s t a i n a b i l i t y ––– 1

In structuring our policy on CSR, the AGC Group compared its Group Vision with a variety ofguidelines on CSR to convince ourselves that following the vision will improveour CSR. We continue to tackle diverse issues based on this vision.

70 groups classified into about 300 factors. Furthermore,these elements were crosschecked with diverse policiesand approaches shown in “Look Beyond.” In other words,this process was conducted to verify whether “LookBeyond” included relevant issues necessary for CSRimprovements.We were able to confirm that our Group Vision “LookBeyond” contains almost all the CSR factors requied ofenterprises. For instance, in protecting human rights, thevision specifies our principles of conduct in which we

respect cultural diversity in race, ethnicity, religion,language, nationality, gender and background while, inenvironmental conservation, it also makes a cleardeclaration that we contribute to the development of asustainable society.To improve our CSR, the first priority for the AGC Group isto make our efforts to put the content of the Group Vision“Look Beyond” into practice, rather than starting on a newactivity.

Management Policy

While evolving our globally integrated management system, we will continue to manage the AGC Group from the perspective of creating shareholder value. Together with our focus on improving employee satisfaction (ES) and pride in accomplishment, customer satisfaction (CS) , and corporate social responsibility (CSR), this will create a spiral of momentum that drives shareholder value continuously higher.

We, the AGC Group, “Look Beyond” to make the world a brighter place.

• To always think with customers' needs as the starting point and act with speed• To never become complacent and to constantly strive for ever higher goals• To continuously seek out innovations in technology, products, services,

business models and human resources and to proactively cultivate new fields• To continuously improve our operations toward maximum efficiency and the

highest quality in every activity and to achieve excellence in all of the work we do collectively and individually


• To respect environmental conservation• To contribute to the development of a sustainable society• To be trusted as a responsible global citizen by the world community• To maintain and improve occupational health and safety and working

environments

Environment

• To be confident and take proud in fulfilling responsibilities without compromise• To develop open and fair relationships with every stakeholder• To strictly observe our business conduct code

Integrity

The Group strives to excel as a highly profitable and fast-growing global enterprise that is a global materials and components supplier based on its core technologies in glass, fluorine chemistry and their related fields. The Group endeavors to be the leader in every market in which it competes.

In order to realize the above, we will:• Concentrate business Areas to Maximize Group Value. • Enhance competitiveness by Leveraging the Group's Core Competencies.• Execute Management by Global Teams.

• To respect cultural diversity in race, ethnicity, religion, language, nationality, gender, and background

• To respect individuals and the diversity of their capabilities• To respect different perspectives and opinions

Diversity

OurOurMissionMission

AGC Group Vision:

The implementation of CSR activities will increase corporate value of the AGC Group continuously in long-term.

1. Legal Compliance2. Fair Competition 3. Relationship with Customers

(1) Product Safety(2) Fair Trade with Sales Distribution Wholesalers and Dealers

4. Relationship with Suppliers and Conductors (1) Fair Trade with Suppliers and Conductors(2) Proper Handling of Entertainment and the Gifts

5. Relationship with Competitors(1) Fair Competition with Companies

6. Relationship with Society (1) Environment and Industrial Safety & Security (2) Export Control (3) Relationship with Public Offices and Political Activities (4) Confrontation with Antisocial Organizations (5) Information Disclosure and Publicity/Advertising Activities

7. Relationship with Employees (1) Working Environment and Occupational Health & Safety(2) Respect for Human Rights

8. Relationship with the Company and its Properties (1) Prohibition of Improper Payments/Transactions (2) Management of and Respect for Intellectual Property (3) Security of Confidential and Personal Information; Prohibition of the Illegal Acquisition of Such Information (4) Proper Handling of Company Properties (5) Prohibition of Insider Trading (6) Prohibition of Actions in which the interests of the Company Contradicts with the Interests of the Executive/Employee

Code of Conduct

(Excerpt)

Stance

Our Principles

OurSharedValues

OurObjectives

OurMission

OurSharedValues

OurObjectives

OurMission

To Excel as a Highly Profitable and Fast-Growing Global Enterprise

CSR Report 20058

To put the goals and processes for CSR improvementsinto practice, the AGC Group is carrying out the followingon the organizational level.In Apri l 2005, Asahi Glass establ ished their CSRCommittee, chaired by CEO Kadomatsu, with the CSRTask Force as a subordinate organization. The CSR Task Force further drives CSR improvementswhile monitoring the progress of specific activities at In-house Companies and Strategic Business Units (SBUs). Itconsists of CSR Committee chairman, ManagementCommittee menmbers, GMs in charge of CSR fromrelevant Group Corporate divisions, Shared Service

Reorganization brings improvements in CSR Centers, and Initiatives, Presidents/Heads of In-houseCompany and SBU.In April 2005, “Corporate Environment & Safety” wasreorganized into “Environmental & Social Responsibility”,aiming at expanding the corporate value of the AGCGroup in CSR, in addition to environmental conservationand occupational health and safety. CSR and theEnvironment also serves as the Working Office of the CSRTask Force to lead in a Groupwide direction, sharerelevant information and encourage coordination amongdivisions.Such efforts have started at Asahi Glass, and will beexpanded to the AGC Group as a whole from 2006.

OurMissionMission To Make the World a Brighter place

To Excel as a Highly Profitable and Fast-Growing Global Enterprise


Environment

Integrity

Diversity

To the AGC Group, CSR means the pursuit of AGC Group Vision

andwe, the AGC Group, the world a brighter place.

OurMission

OurSharedValues

Our Objectives

Our Principles

OurMission

OurSharedValues

Our Objectives

Our Principles

®,

to make

CSR Report 2005 9


To improve CSR, the AGC Group analyzes the currentsituation and constantly studies and devises specificsolutions. As a result, the following four priority issueshave been identified.

1. Customer Satisfaction (CS)

2. Employee Satisfaction (ES)

3. Environment (global and social environment)

4. Compliance (legal compliance and corporate ethics)

Starts with four major issues for futuredevelopment

For these four agendas, the CSR Committee monitors thePlan-Do-Check-Act (PDCA) cycle to identify the bestapproach.With the aim of surpassing stakeholders’ expectations, theAGC Group has made its best efforts to continuouslypursue becoming a more reliable corporate entity withimprovements to CSR by putting into practice the contentof our Vision “Look Beyond”.

Members: Management Committee members, GMs in charge of CSR from relevant Group Corporate divisions, Shared Service Centers, and initiatives, Presidents/Heads of In-house Companies and SBUs

Overall monitoring

···

···

CSR Committee (chaired by CEO)

Group Corporate divisionsShared Service Centers

Initiatives

PrProgress monitoringess monitoringProgress monitoring




In-houseCompany

In-houseCompany SBU SBU *1*1

CSRTask force

Overall policy

Policy Policy developed

Policy developed


Policy developed

Policy developed

Policy developed


Policy developed

(Working Office: Environmental & Social Responsibility)

Organization for the CSR Promotion

*1 SBU: Strategic Business Unit

CSR Report 200510

Asahi Glass Flat Glass Company, Japan/Asia Pacific isputting its energies into developing mado2™, a windowinsulation unit, and their Sun Balance™ high-performanceglass, use of which can contr ibute to reducingenvironmental impact, along with activities to reduce theenvironmental impact of CO2 emissions and industrialwaste generated during the manufacturing process.At present, there are 50 million residences in Japan, ofwhich 27.5 mil l ion are houses and the rest areapartments. Furthermore, 560 thousand houses and 650thousand apartments are being constructed every year. Alltypes of housing need windows, which let in heat insummer and lose it in winter. We are thus dependent onusing air conditioners and emit large levels of CO2 withoutbeing aware of it.Under these circumstances, the attention of the generalpublic and industry is increasingly focusing on high-performance glass, which helps us live comfortably byreflecting heat in summer and absorbing it in winter andtherefore saves energy used in air conditioning, resulting ina reduction in CO2 emissions and electricity consumption.Sun Balance™ , the next-generation high-performanceglass developed by Asahi Glass, is able to satisfy theserequirements with its environmental consciousness andeconomic efficiency. mado2™ is a high-performancewindow unit that fits on the inside of the existing windowframes in a house and increases the thermal efficiency.As a result of these efforts, CO2 reductions during use of aproduct exceed the CO2 emissions during themanufacturing process at a certain point. The chart belowshows a comparison of the CO2 reductions during useestimated from mado2™ and Sun Balance™ sales resultsin and after 2000 against CO2 emissions during themanufacturing process*1. It has been found that CO2

reductions during use exceeds CO2 emissions during the

Use of high-performance window glassreduces CO2 emissions

manufacturing process for the several years since theintroduction of those products. If all housing units in Japanwere equipped with mado2™ or Sun Balance™, thiswould greatly contribute to achieving the CO2 reductiongoal of about 62 million tons required for Japan under theKyoto Protocol.Actually, we had already started developing products thatcontribute to CO2 reductions during usage in 1992, whenthe Flat Glass Company started developing and marketingthese kinds of products. The Company is working tocontinually improve the eco-efficiency of windows.

20,000

10,000

–10,000

0

–20,000

–30,000

–40,000

–50,000

–60,000

(t-CO2)

2000 2001 2002 2003 2004 (year)

9,121

-39,177 -38,469 -38,137-40,364

-42,986

8,947 8,926 9,257

Increase in CO2 emissions during the manufacturing process (average annual amount for ten-year consumption)

Compared to single-pane glass

CO2 reduction (during usage and manufacturing process)

Reduced CO2 emissions due to energy-saving effect during usage (average annual amount)

9,787

-48,298 -47,415 -47,064 -49,621-52,773-52,773

-39,177 -38,469 -38,137-40,364

-42,986

Trend in CO2 emissions during the manufacturing process and cumulativeCO2 reductions due to energy-saving effect during usage calculated fromsales from 2000

Reduces Environmental Impact Over the Life Cycle: Asahi Glass’s High-PerformanceGlass Products

*1 Boundary of life cycle assessment – prerequisite of CO2 analysis• LCI data from mining through transportation of flat glass materials and fuel:

Quoted from Introduction to LCA Practice (3. LCI case study of glass bottles; 3.4.1 Raw materials manufacturing process; Table 3-7)• Flat glass manufacturing, cutting, sputtering, and double-glazing unit manufacturing processes:

Calculated from fiscal 2003 actual data from the Flat Glass Division of Asahi Glass’s Kashima Plant and AGC AX Co., Ltd. Kashima Plant• Raw materials for sash (aluminum, PVC, etc.), spacer and sealant for doubled-glazing units

Quoted from and referred to http://www.yasuienv.net/CREST/lca-thinking/useful/gentanni_menu.htm (Japanese)• Energy-saving efficiency during usage

1) Single-pane glass window →Pair Glass™, ordinary double-glazing unit 2) Single-pane glass window →Sun Balance™ (high insulating performance double-glazing unit):

Quoted from Energy Conservation by Improvements in Housing Window Structures, Plastic Window Promotion Committee3) Inner Window™, double-layer glass windows, installed, 4) mado2™ installed (using double-glazing unit), 5) mado2™ installed (using high insulating

performance double-glazing unit): Quoted from the reduction estimates in the high-performance housing/building energy system promotion programpromoted by NEDO, March 2005 (energy saving in home improvements for thermal insulation)

CSR Report 2005 11


In addition to their efforts to reduce the environmental impact during manufacturing, Asahi Glass alsodevelops and markets window glass products that will contribute to reductions in environmentalimpact during usage. Due to their excellent eco-efficiency, these innovative products achieve CO2

reductions that exceed CO2 emissions during the manufacturing process at a certain point,compared to ordinary single-pane glass window.

mado2™, put on the market in February 2004, is a high-performance Inner Window™ unit that fits on the inside ofthe existing window frames in a house. If a customerchooses one application of the unit based on his or herpreference, it cuts noise, increases thermal efficiency andguarantees security.For instance, choosing a high insulating performancedouble-glazing unit is best for the most effective insulation.If a customer uses a unit consisting of a 3 mm glasssheet, a 12 mm air gap, and a 3 mm glass sheet coatedwith a special metal f i lm, it wi l l save 25% of air-conditioning energy, compared to single-pane glass(District III, the entire Japan except for the northeasternregion, according to the reference materials provided bythe Plastic Windows Promotion Committee). A customermay also choose a laminated glass, which will enhancesoundproofing and house security.Inner Window™, marketed to provide better sound andthermal insulation, has been selling for over 20 years. As aglass manufacturer, Asahi Glass is proud of mado2™,developed based on the technologies and experienceobtained from Inner Window™. It consists of high-performance glass in an advanced sash frame givingimproved thermal and sound insulation.

mado2™ is a high-performance Inner Window™ unitthat fits on the inside of the existing window framesin a house and reduces the environmental impact.

Sun Balance™, a product fitted in new houses, is a highinsulating performance double-glazing unit, in which theside facing the dry air layer is coated with a special metalfilm. It satisfies the Next-Generation Energy-SavingStandards Japanese Ministry of Land, Infrastructure andTransport, stipulated to reduce the energy consumed byair conditioning by about 20%.Sun Balance™ reflects sunlight to prevent rising roomtemperature in summer, increasing air-conditioningefficiency. In winter, it prevents radiant heat from beingwasted, increasing heating efficiency. One example of theunit consisting of a 3 mm glass sheet, a 6 mm air gap,and a 3 mm glass sheet transmits 41%, in other words, itblocks 59% of solar radiation. Single-pane glass is able toblock only 12% of radiation. In winter, when we do notwish to let the warmth out, a Sun Balance™ unit with theabove structure has a heat transmission coefficient (Uvalue) of 2.6 W/m2·K, while it is 6.0 W/m2·K for single-paneglass, which means that it lets out more than twice asmuch heat. Sun Balance™ is also highly effective incutting down UV rays and preventing condensation.In annual CO2 emissions from a house in Tokyo, a housewith Single-pane glass windows emits 1,903 kg of CO2

while that fitted with Sun Balance™ windows emits 1,246kg of CO2. This means a reduction of 35%, equivalent to657kg of CO2, and saving about ¥43,000 on electricitybills. We continue to expand our marketing of Sun Balance™and mado2™.

Sun Balance™ , made to be fitted in new houses,reduces CO2 emissions by about 35%, comparedto single-pane glass

6.0W/m2·K

2.6W/m2·K

Comparison of thermal insulation (heat transmission coefficient: U value)

Single-pane of glass (3 mm) High insulating performancedouble-glazing unit (3 mm + 6mm air gap + 3mm)

Inner Window™ “mado2™” Inner Window™ is a set of windows to be installed in addition to existingsingle-pane windows from inside of the house to increase thermal and soundinsulation and security.

CSR Report 200512

The Kyoto Protocol, coming into effect in February 2005,stipulates a mandatory reduction in greenhouse gases(CO2, methane, nitrous oxide, HFC, SF6, PFC) by the startof the period from 2008 to 2012 at a given percentage(6% for Japan, 7% for the United States, and 8% for theEU) over 1990 levels. Figures for the Global WarmingPotential (GWP), the index used to translate the level ofemissions of various gases into emission of one kilogramof carbon dioxide, are high for HFCs (140-11,700) andSF6 (23,900). As a manufacture of fluorinated greenhousegases (GHGs) such as HFCs and SF6, Asahi Glass issearching for how to achieve the mandated goals underthe Kyoto Protocol and assume their corporate socialresponsibility (CSR). The Company has already startedresearch and studies into this issue and had developed itsown measures for preventing global warming even beforethe Kyoto Protocol was adopted. Our Chiba Plant especially focused on reducing fluorinatedGHG generated during manufacturing. As for HCFC-22, about 2% of HFC-23 is generated duringthe manufacturing process. Our Chiba Plant thereforeconstructed a facility to collect HFC-23 for destruction

94% reduction in Fluorocarbons emissionsfrom 1995

while developing the technology to reduce the amount ofHFC-23 generated. At the destruction facility, fluorinatedGHG are burned in a incinerator and turned into moistureand CO2. The Chiba Plant and Kashima Plant areequipped with two incinerators each. As a result, we succeeded in drastically cutting down onfluorinated GHG emissions. The chart on the 13 pageshows the changes in fluorinated GHG emissions at AsahiGlass. According to the chart, we have reduced emissionsby about 94% compared with 1995. Regarding thetargets on a CO2 basis for fluorinated GHG reduction setby the Japanese industry associations, we achieved –97%for HFC-23 (target: –70%*1), and –92% for SF6 (target:–75%*2). It is clear that Asahi Glass has outdistanced itscompetitors with such significant progress.We are not fully satisfied with these results yet. At theChiba Plant, more efforts are being made. They includepaying careful attention to routine management,promoting employee awareness of global warming, andthus saving electricity and fuel consumption. We continueto strive to increase global environmental conservation. Starting from what we know we can achieve, we continueto take on new challenges. We are sure that you will beconvinced that our management policy “JIKKO” is working

Tackling Reductions in Fluorocarbons Emissionsfor Ten Years

Fluorocarbons destruction facility (capacity of 1,000 t/year)

CSR Report 2005 13


Among the greenhouse gases (CO2, methane, nitrous oxide, HFC, SF6, PFC) stipulated in the Kyoto Protocol,Asahi Glass manufactures fluorinated greenhouse gases such as HFC, and SF6. Reviewing the existingmanufacturing process, the Company is trying to reduce emissions into the air and to prevent leakage. Asahi Glass collects, destroys and recycles fluorocarbons after use, and the amount collected is increasingyear by year. Abbreviations CFC: Chlorofluorocarbon HFC: Hydrofluorocarbon HCFC: Hydrochlorofluorocarbon PFC: Perfluorocarbon

properly within the PDCA cycle.

In 1997, Asahi Glass started to collect fluorocarbons(CFC, HCFC, HFC) from customers to destroy them at ourfluorocarbon destruction facilities.It was decided under the Montreal Protocol that usage ofCFCs, which have had significant adverse affects on theozone layer, would be phase out. The AGC Groupmanufactures CFC alternatives (HCFC, HFC) to providethem to such customers as home appliances andautomobile manufacturers. The Protocol mandated thatfluorocarbons, which are used for refrigerants in airconditioners and refrigerators, be collected after use forappropriate disposal pursuant to the Law for Recycling ofSpecified Kinds of Home Appliances (“Home ApplianceRecycling Law”) and the Law concerning the Recoveryand Destruction of Fluorocarbons (“FluorocarbonsRecovery and Destruction Law”). As a f luorocarbon manufacturer, we consider thedestruction of used fluorocarbons to be part of our CSRefforts, and so Asahi Glass has constructed the industry’slargest destruction facility with a capacity of 1,000tons/year to dispose of fluorocarbons collected fromcustomers. HCFC-22 is recycled into f luorspar orfluororesin at the facility.Fluorocarbons collected from customers are put into one-ton cylinders for gas chromatography analysis andsubsequent sorting (to be destroyed or recovered). Sortedcontainers are carried to the facility for pyrolysis, whichuses a liquid injection method approved by the United

Destroying and recycling of fluorocarbons

Nations Environmental Programme (UNEP). Thenvaporized fluorocarbons are blown into the incineratortogether with fuel for pyrolysis at a high temperature ofover 1,200˚C. Pyrolyzed fluorocarbons are instantly cooledto prevent dioxins from being generated. The Chiba Plantdestroyed110 tons of fluorocarbons by this method in2004.In January 2005, when the End-of-Life Vehicle RecyclingLaw came into effect, Asahi Glass was designated as acontractor to collect CFCs used in automobile air-conditioning systems, and swung into full gear with thisscheme. Asahi Glass is assigned the area including Tokyo,Kanagawa, and Chiba, which includes quite a number ofvehicles registered, and we therefore expect to collectincreasing amounts of fluorocarbons from now on. If weare able to improve the collection rates for business-useair-conditioning systems, freezers, and vending machines,which remain around 28%, we can expect to drasticallyincrease the amount we deal with. Asahi Glass would liketo increase the amount to 500 tons as soon as possible. The AGC Group strives to be a globally outstandingenvironmentally-conscious enterprise by being fullyresponsible for the products offered to our customers upuntil the very end of the product life cycle, as well asrestricting emissions of substances that may adverselyaffect the environment during manufacturing of theproduct.

*1 Japan Fluorocarbon Manufacturers Association*2 Japan Chemical Industry Association

0

2,000

4,000

6,000

8,000

10,000

12,000(1,000 tons CO2 equiv.)

1995 2000 2001 2002 2003 2004*2005 2006 (fiscal year)* Another HFC added from fiscal 2004

target

690 531 4736048211,181

11,026

3,486

Fluorinated GHG Emissions (Asahi Glass)

FilterStirring

ScrubberQuencher

Substance Substance with CFCs with CFCs destrdestroyed oyed (Vapor) apor)

Water

Fuel Neutralizingagent

Ca(OH)2 (Slaked lime) CaF2 (Fluorspar)

RecyclingTo wastewater treatment facility

CFC containerCFC container

Substance with CFCs destrSubstance with CFCs destroyedoyed(Water solution)ater solution)

CFCsCFCs

CFC container

CFCs

Substance with CFCsdestroyed (Vapor)

Substance with CFCs destroyed(Water solution)

Emission into atmosphere (Contains moisture, carbon dioxide,

oxygen, and nitrogen)CFCsEvaporatorThermal

decomposition Incinerator

Fluorocarbon destruction by the liquid injection method

CSR Report 200514

As a member of the global community, we are committedto fulfilling our social responsibilities.We are providing products/services that can be used withsatisfaction by our customers, and that free them fromworry about environmental pollution. We are committed tocreating corporate value and putt ing into effecttransparent and proactive environmental management.This is what Automotive Glass Company, Japan/AsiaPacific General Division declared in its environmentalpolicy. This policy focuses on six agendas: namely,Complying with Laws and Declarat ions, Creatingenvironmentally-friendly products and services, Providingthe most advanced environmental products to ourcustomers, Continuous improvement to reduce theEnligtenment environmental impact and prevent pollution,activities and information disclosure/sharing and Overseasactivities. It is concluded that the Automotive GlassCompany seeks to supply customers with eco-friendlyproducts that contain reduced amounts of resources,have a lower environmental impact, and are morerecyclable, as well as services and information.The Automotive Glass Company, who purchases raw

Promoting green Purchasing as a part ofIntegrated EMS activities

materials from his suppliers for added value and providesautomotive manufacturers with products, stays focusedon green purchasing to develop their IntegratedEnvironmental Management system (EMS) activities.These days, restrictions have been put on raw materialsused for automobiles, including the End-of-Life Vehicles(ELVs) Directive (2000/53/EC) in Europe and otherdomestic regulations. Automotive manufacturers use eco-friendly materials and also seek for parts that aremanufactured by processes that have lower environmentalimpact. It is already common-sense among automotivemanufacturers that environmental consciousness gives acompetitive advantage.As automotive manufacturers are our customers,“environmental consciousness is a competitive advantage”is also our motto. Purchasing raw materials in line with ourbasic environmental policy leads to us assuming ourcorporate responsibilities as a global citizen and also leadsto customer satisfaction. The Automotive Glass Companylets his suppliers upstream know about their plans andinvolves them in further green Purchasing efforts.

Aiming at a Win-Win Relationships withCustomers and Suppliers by Establishing GreenPurchasing Guidelines for Automotive Glazing

CSR Report 2005 15

The Automotive Glass Company encourages green purchasing of raw materials and parts. The Companyprovides his suppliers with guidelines comprising Asahi Glass’s own standards and those that customerswish to set in order to expand green partnerships for procuring raw materials with low environmental impacts.

Green procurement is carried out in line with Asahi GlassGreen Purchasing Guidel ines. We disclosed theAutomotive Glass Company’s green purchasing policyand guidelines for regulated substances to our suppliers,and then prepared the guidelines combined with AsahiGlass’s own policy, respecting relevant legislation inJapan, the Americas and Europe as well as the regionalregulations of automotive manufacturers. After the original version was issued in September 2002,we have periodically reviewed the guidelines so thatchanges in relevant legislation in Japan, the United Statesand Europe, market needs, and other useful informationcan be incorporated. The third edition, for which thesecond revision was made in March 2005, is currentlyissued. An English version is also available for suppliersabroad.In October 2003, the Company worked on establishing adatabase system to improve availability while revising theguidelines. In the database, we store data on the results ofsurveys on chemical substances contained in materialsand LCA analysis, and results of the questionnaire onenvironmental management, all of which were offered byour suppliers. We are therefore able to establish asustainable system environment accessible to oursuppliers, Asahi Glass, and customers. At the secondrevision, we increased the number of substances subjectto regulation so as to satisfy stricter requirements under

Guidelines for Green Purchasing revised in March 2005

the relevant legislation. The Automotive Glass Company holds briefings for hissuppliers whenever a revision is made. The Companyexplains revised items and asks his suppliers to clarify thecharacteristics of substances that come under theguidelines, use the substances in ways that comply withthe required environmental standards, and pay attentionto environmental conservation during the manufacturingand management processes. Fostering furtherunderstanding with suppliers by replying to all theirquestions, we are establishing green partnerships for awin-win relationship with them in environmental terms.At the Automotive Glass Company we have already heldthree briefings on raw materials such as glass andinterlayer for our suppliers. Briefings are also held in ourKitakyushu, Aichi, and Sagami Plants for secondarymaterials used in the manufacturing process, which haveattracted hundreds of suppliers.

Green purchasing is spreading throughout society as aneffective measure for establishing a sustainable society.Globally, one out of three vehicles on the road has had theAGC Group’s glazing installed by now. As a leadingautomotive glass manufacturer and seller, the AutomotiveGlass Company is developing plans to further promotegreen purchasing, responding to the needs of society andour customers.Revised guidelines for 2005 contain an item askingsuppliers to acquire the environmental managementsystem (EMS) certification by an independent organization.Automotive Glass Company Japan/Asia Pacif icHeadquarters distributes the cards to our employeesincluding those working in our plants, encouraging themto fill in their own environmental goals and the roles theyhave, and carry them all the time during working hours.These cards are also distributed to partner firms for bettercollaboration. Thus, we continue our efforts to constantlyprovide top environmental-quality products to customers.

*1 See page 31 for integrated EMS

Providing customers with top environmental-quality products

Guidelines for Asahi Glass Green Purchasing (revised in March 2005)


AGC GroupProfile


CSR Report 200516

The AGC Group consists of Asahi Glass Co., Ltd. and 253consolidated subsidiaries (including 186 outside Japan),active in four business areas: Glass, Electronics andDisplay, Chemicals, and Others.About half the sales come from overseas operations andthe total work force consists of 24% in Japan and 76%outside Japan. It is a fully global enterprise with a range ofdifferent cultures, capabilities, and human resourcesbrought together from all over the world. Committed to improving the corporate value, the AGCGroup strives to excel as a highly profitable and fast-growing enterprise that globally supplies materials and

components based on its core technologies in glassfluorine chemistry and their related fields.

Name:Head Office:

Date of Establishment:Date of Incorporation:

Paid-in Capital:Stock Issued:

Number of Employees:President & CEO:

Asahi Glass Co., Ltd.1-12-1, Yurakucho, Chiyoda-ku, Tokyo 100-8405, JapanSeptember 8, 1907June 1, 1950¥90,472 million1,175,242,497 sharesNonconsolidated: 5,886; Consolidated: 56,776Masahiro Kadomatsu

(As of December 31, 2004)Company Profile

Europe AsiaNet sales: ¥341.8 billion Operating income: ¥52.2 billionEmployees: about 17,000

JapanNet sales: ¥868.6 billion Operating income:¥67.5 billionEmployees: about 15,100

The AmericasNet sales: ¥204.6 billion Operating income: ¥3.2 billionEmployees: about 7,100

Global GroupNet sales: ¥1,475.7 billion Operating income: ¥139.4 billionConsolidated subsidiaries: 253Employees: about 56,800

Net sales: ¥295.7 billion Operating income: ¥25.9 billionEmployees: about 17,600

In-house Company or SBUSegment

Glass Flat Glass Company

Automotive Glass Company

Asahi Fiber Glass

Asahi Techno Glass

Main Products

Flat glass

Automotiveglass

Others

Float glass, Double-glazing, Figured glass, Wired glass, Heat reflective glass, Heat absorbing glass, Fabricated glass, Mirrors

Laminated glass, Tempered glass

Glass fiber products

Speciality glass (i.e. fluorescent light glass)

Electronics& Display

Chemicals

Others

Display Company

Electronic Materials and Products General div., Asahi Techno Glass (electronics-related products)

Display

Electronicmaterials

Fluorochemicals

Chlor-alkalis

CRT CRT glass

TFT-LCD glass, PDP glass, TN/STN LCD glassFPD

Optoelectronics, Frit and paste, Semiconductor-related products

Optrex

Chemicals Company

Ise Chemical, etc.

Asahi Glass Ceramics, etc.

Small- and medium-sized displays

Fluorinated resins/gases and solvents/water and oil repellent agents, Ion-exchange membrane, Pharmaceuticals and bulks

Soda ash, Caustic soda, Caustic potassium, Hydrochloric acid, Vinyl chloride products

Urethane and others

Iodine-related products and others

Ceramic-related products and others

–200

20406080

100

140120

Mar. ’00 Mar. ’01 Mar. ’02 Mar. ’03 Dec ’03

(billions of yen)

Dec ’04

60.7 59.0

14.0 21.0

-4.4 5.3

37.2

83.2

5.8

139.4

67.5

111.7

Consolidated

Nonconsolidated

Glass 50%

Chemicals19%

Electronics &Display 30%

Others 5%

Reflected percentages do not total 100% due to rounding off of fractions.

0200

400600800

1,0001,200

1,6001,400

1,257.1

1,312.8 1,263.2 1,295.0

1,257.1

693.9 604.6

550.1 542.8

1,312.8 1,263.2 1,295.0

Mar. ’00 Mar. ’01 Mar. ’02 Mar. ’03 Dec. ’03

(billions of yen)

693.9 604.6

550.1 542.8

Dec. ’04

579.9

1,475.7

579.9

1,243.0

413.7413.7

1,475.71,243.0

Consolidated

Nonconsolidated

Net Sales

Operating Income

Sales by Operating Segment (at the end of December 2004)

CSR Report 2005 17

InvestorRelations

Asahi Glass carries out aggressive IR activities on a global scale, includingmeetings and briefing sessions, to ensure fair evaluation of our marketablesecurities (including shares and corporate bonds) and interactivecommunication between the management and the market.


Our management pol icy “JIKKO” - Execution forExcellence aims for a continuous increase in shareholdervalue. To achieve this, we are engaged in active IR tomake our business activities and changes in sales widelyknown to our investors.Generally, we have some 250 inquiries from analysts andinstitutional investors in and out of Japan for interviewsand meetings, and our IR staff respond to these requests.Of those inquiries, about 70 interviews and meetings arefor overseas institutional investors. The current increase inthe number of such opportunities indicates the fact thatoverseas institutional investors have a relatively high levelof interest in the AGC Group as a global enterprise.Considering this situation, we believe it very important toprovide information to as many people as possible as perour policy of “fair disclosure.” To be specific, various toolsused for IR, documents disclosed to participants inbriefings and meetings to introduce our company or ouraccount settlement and data distributed by streamingmedia, including video and audio, are available on thewebsite both in Japanese and English. Our CEO, CFO and other managerial staff directly visitinstitutional investors on a periodic basis to explain ourbusiness and f inancial condit ions. Visits of ourmanagement to foreign institutional investors, whichstarted in 2000, cover Europe, the Americas andAsia/Pacific every year.We need to deal with individual investors differently, for theimpression our group makes on them varies from generalconsumers and investors. For instance, it seems relatively

Some 250 Meetings, Interviews with theMedia, and Presentations Held Annually forActive IR

difficult for end consumers to get an image of Asahi Glassbecause our status, as a materials and componentssupplier, does not give them any clear impression. Thus,we started IR for the general public by improving theperiodical we issue to individual investors AGC Reviewand placing ads in the media, including TV commercialsso that our name will be recognized by consumers andattract their attention.Asahi Glass will further improve our IR activities anddeepen mutual communication with investors and themarket.

A new method to evaluate and select which companies to invest in isdrawing attention mainly in Europe and the Americas, which emphasizes theevaluation of social responsibility in addition to the conventional financialanalysis. Investment based on this idea is called “socially responsibleinvestment.” Companies are evaluated based on the SRI index consisting ofsocial responsibility items, including consideration of the environment, humanrights, and compliance, and will be included in some SRI funds depending onthe index. Our stocks are included in several SRI funds based on the SRIindex.

Introduction to SRI (Socially Responsible Investment)

C O L U M N

FTSE(an index provider offered jointlyby the Financial Times and theLondon Stock Exchange)

Dow Jones(US investment advisorycompany)

Presentations on our business activities

Please refer to the following URL for details ofIR information .

http://www.agc.co.jp/english/ir/

Major SRI indexes in which Asahi Glass is included

Customer Satisfaction (CS) and Quality Improvement


CSR Report 200518

In September 2004, we published the AGC Group CSPolicy Guidelines, which is Asahi Glass’s statement to thepublic under the name of the CEO of the AGC Group andrestated before commemorating the 100th anniversary in2007. The Guideline announce our basic attitude toenhanced efforts in CS and quality improvement. TheAGC Group introduced and practices the qual itymanagement system (QMS) under the banner of “GreaterCS and Quality Improvement Efforts.”In our management policy, “JIKKO” - Execution forExcellence, the basic idea is to strictly follow the PDCA(Plan-Do-Check-Act) cycle in carrying out all our businessactivities and services in every aspect. The management policy states that the Group will “createa spiral of momentum that drives shareholder valuecontinuously higher.” whi le improving customersatisfaction as well as employee job satisfaction, and pridein accomplishment (ES) and corporate socialresponsibilities (CSR). As specified in the AGC Group CSPolicy Guideline, we will seek out for “Innovation &Operational Excellence” spelt out in “Our Shared Values”of the AGC Group Vision “Look Beyond” and providecustomers with products and services that can give themfull satisfaction.All the past efforts in improving quality of products offeredby each group company have been made in line with theAGC Group Quality Management Principle. This Principle,however, provides for the basic policies for QMS efforts onthe part of each AGC Group company and thus fails toclearly show to our customers our commitment to greaterCS and quality improvement efforts. Now the Principle hasbeen given a substantial overhaul simultaneously with the

AGC Group CS Policy Guidelinepublication of the AGC Group CS Policy Guideline. Therevised Principle specifies a clear scope of application,which is all the products and services offered by everyAGC Group company to customers and all the servicesrelated thereto, and articulately defines the responsibilitiesof CEO, division heads (i.e. President/Heads of In-houseCompanies/SBUs), heads of Group Corporate Divisions,Service Centers, Research Center and the presidents ofthe companies affiliated to the foregoing. In addition, theroles of CEO and division heads are also specified. CEOand division heads hold each other responsible forestablishment of an organization that should promote CSand quality improvement efforts, continuous improvementin QMS, and periodic management reviews (CMR).Division heads are responsible for monitoring customers,while the CEO is responsible for establishment andexecution of processes necessary for QMS for the entireAGC Group by assigning corporate quality managers.Comments and opinions of customers and third partiesare always incorporated to the process of continuousimprovement of efficiency and effectiveness of QMS,thereby ensuring CS and quality improvement efforts.

We set up the Quality Improvement Division in April 2005to ensure that the AGC Group CS Policy Guideline and theAGC Group Quality Management Principle spread widelythrough the Group and to achieve the best QMS. Theexecutive off icer in charge of corporate qual itymanagement representitive was assigned as GM of theDivision.The Quality Improvement Division pays regular visits toAGC Group companies, including In-house Companies

Establishment of the Quality ImprovementDivision

Division HeadHead

CEODivision QMS

Division QMS

Division QMS

Corporate QMS

CEO

Quality Improvement Division

CQMRResponsibilities of CEO

1) Commitment to CS1) Commitment to CS2) Establishment of CS Guidelines2) Establishment of CS Guidelines3) Execution of CMR3) Execution of CMR4) Inter4) Internal communicationnal communication5) Appointment of Corporate Quality 5) Appointment of Corporate Quality Management Repr Management Representative (CQMR)esentative (CQMR)

Responsibilities of the Division Heads

1) Responsibility for pr1) Responsibility for product qualityoduct quality2) Establishment and continuous impr2) Establishment and continuous improvement of QMSovement of QMS3) 3) Setting and executing quality policies and quality objectivesSetting and executing quality policies and quality objectives4) Appointment of Division Quality Management Repr4) Appointment of Division Quality Management Representative (DQMR)esentative (DQMR)5) Acquiring the necessary managerial r5) Acquiring the necessary managerial resouresourcesces6) Executing the in-division management view6) Executing the in-division management view7) Monitoring customer per7) Monitoring customer perceptionception8) T8) Transfer of authorityransfer of authority

1) Responsibility for product quality2) Establishment and continuous improvement of QMS3) Setting and executing quality policies and quality objectives4) Appointment of Division Quality Management Representative (DQMR)5) Acquiring the necessary managerial resources6) Executing the in-division management view7) Monitoring customer perception8) Transfer of authority

Responsibilities and roles of CQMR

1) Establishment and enforcement of the processes necessary for QMS

2) Reporting CEO on the necessity of QMS improvement

3) Ensuring that everyone knows the importance of complying with customer requirements

Division Head

Division HeadHead

Division Head

Division HeadHead

Division Head

1) Commitment to CS2) Establishment of CS Guidelines3) Execution of CMR4) Internal communication5) Appointment of Corporate Quality Management Representative (CQMR)

Division QMS

Division QMS

Division QMS

AGC Group Quality Management Principle

Management Policy

We will provide products and services that conform to the quality requirements of customers as well as statutory and regulatory.

(1)

We will incorporate the concept of CS into every working day and pursue “Look Beyond”-“Innovation & Operational Excellence.” We will be thoroughly watchful and attentive in satisfying customer requirements in order to establish AGC by “far and away” as the top brand.

(2)

—To achieve the new management policy “JIKKO” - Execution for Excellence,—

We will all participate in the continuous improvement of quality management effectiveness and efficiency and each of us will individually strive to increase the value of our work.

(3)

In order to ensure the adove points are realize,we will establish a policy based on these guidelines and set realistic and achievable targets. With the cooperation of our business partners we will then do our best to realize customer satisfaction.

(4)

AGC Group CS Policy Guideline

CSR Report 2005 19


Our management policy aims to improve customer satisfaction (CS) and quality. Wecarry out our daily activities from the viewpoint of CS to achieve the best we can. The watchword is“incorporating the concept of CS into every working day”

and SBUs, interviews division heads regarding CS andquality improvement efforts, and distributes questionnairesto employees through the website. The purpose is tounderstand how much the management policies in theAGC Group CS Policy Guideline are understood bydivision heads and how smooth the currentcommunication with customers is in order to lay down aclear path for the Division’s activities.Although each AGC Group company can develop themeasures needed in general on their own, they are stillpoor at fol lowing the “Do-Check-Act” cycle. Thisdrawback may be el iminated by each employeeunderstanding the importance of CS and qual ityimprovement efforts and participating in putting QMS intopractice. The regular efforts being made by the QualityImprovement Division to this end includes establishing andimplementing the processes necessary for QMS,evaluating the status of how CS and quality improvementis being carried out in each division, and providingeducation and training.

The AGC Group implements the “principle of greater CS andquality improvement efforts” with a shared slogan of“incorporating the concept of CS into every working day.”This translates as putting ourselves into our customers’shoes, clearly understanding customers’ requirements,l istening to customers’ evaluation of our work, andcontinuously improving our daily activities. The QualityImprovement Office formed Club QMS to better familiarizethe Group with the idea of Incorporating the concept of CSinto every working day. Any employee of the AGC Group canjoin Club QMS. With “learning together, growing together” asthe keyword, the Club carries out publicity activities based oninteractive communication, which mainly includes distributionof the newsletter. Currently, active exchange of notes andideas is going on among the employees, with many divisionheads also being members.It is our firm belief that we can provide our customers withproducts and services that can give them full satisfaction byall AGC Group employees – some 57,000 people – workingon the concept of Incorporating the concept of CS into everyworking day as the principle behind our daily activities.

Incorporating the concept of CS into everyworking day

On February 17, 2004, a pharmaceuticals firm, one of ourcustomers, complained to our Chemicals Company that theyhad found a foreign material mixed in with the material suppliedby us. Three days later, the Kashima Plant received the problemmaterial, analyzed it, and found that the foreign material waspart of the fluororesin packing and that it fallen off from adefective electromagnetic feeder and had become mixed withthe product in the packaging process. As a result, on March 12the Chemicals Company publicly announced a self-imposedrecall of all baking soda – a total weight of 1,900 tons – shipped

for use in pharmaceuticals and food additives.This is one example of how our Chemicals Company coped withan abnormality. The Company took it very seriously, acted swiftlyand successfully avoided the worst. This incident was a goodlesson on how the AGC Group should think and act for CS.The lesson made us realize afresh the importance of, and ourfirm commitment to, never causing quality problems, which allemployees should keep in mind. Listening to the complaint andhandling it swiftly and accurately was a matter of course. Wehave again reassured ourselves that we are promoting CS in thefield of material manufacture by continuously carrying outimprovement and transforming quality control, as well asadministrative management.

Self-imposed Recall of SodiumBicarbonate by Chemicals Company

Given its long history of operations as a material manufacturer, theAGC Group should be careful not to lose sight of customer needswithout realizing it. When we visit various divisions and listen to the

staff there, we notice the absence of the customer in what they seeand do. It is time to change ourselves and become an organizationthat takes CS and quality improvement efforts seriously byimproving our corporate culture. The mission of the QualityImprovement Office is to have all employees, including divisionheads, understand the importance of greater CS and qualityimprovement efforts and act from a viewpoint that incorporates CSinto our daily activities.The road is winding. The goal is still a long way away. Yet, as GM ofQuality Improvement, I find my job very challenging and worth allthe effort. I am proud of having taken on this job.

Revolutionizing Corporate Cultureby Incorporating the Concept ofCS into Every Working Day

Toru KawatsuraExecutive officer and General Manager of QualityImprovement

M E S S A G E

C O L U M N

Diversity

CSR Report 200520

The AGC Group is promoting global human resourcesmanagement (HRM) as one of the key issues in realizing andspurring the evolution of globally integrated management inthe AGC Group. We have two programs to help capablepeople in our organization, acquire global leadership,regardless of nationality or home company.The first program is the AGC Institute launched in fiscal 2004.It has two courses: the Global Leadership Session and theDynamic Leadership Session. The former is a three-daysession for ten people, typically division heads and theirequivalents in Japan, Europe, the Americas and Asia selectedby the CEO, where the participants discuss various themesduring the session to acquire the necessary knowledge asglobal leaders. The Dynamic Leadership Sessions started inSeptember 2004, with 24 middle managers from Japan,Europe, the Americas and Asia/Pacific. They took part in aweek’s training at a Swiss business school and, after thetraining, they carried out task force activities for about fourmonths in teams with a mixture of nationalities. Theysubmitted a report to the CEO in February 2005.The second program is the Asian University launched in2003 intended for managers in Asia/Pacific. They learn theVision, Shared Values and policies of the AGC Group and thelatest management methods to improve their managementcapabilities. The second session of the Asian University washeld in July 2004.Both programs are to be held this year, too.

The HRM policy of Asahi Glass is to establish a culture andsystem in which diverse and independent individuals cancontribute to improving the company and experience asense of challenge, accomplishment and fulfillment, while

HRM System of Asahi Glass

Global Human Resources Managementexercising his or her abilities. We have four specific goals for HRM: (1) to strengthen theindividual, (2) to create a culture in which we can enhanceour competitiveness and improve on our result-orientedmindset, (3) to develop and utilize people to respond toimprovements in globally integrated management, and (4) toestablish a culture and environment in which diverse peoplewith different employment patterns and approaches to theirjobs can demonstrate their abilities.To achieve four goals, we have introduced a separate HRMsystem based on roles and functions for non-managers,divided into three courses as follows:The E (Expert) Course intends to drive business strategiesand enhance divisions for personnel who will play core rolesin their own divisions. The S (Skill) Course intends to ensuresmooth production by mastering productive techniques andskills and passing those on to the next generation ofemployees. The C (Clerk) Course helps employees carry outclerical operations accurately and speedily.The average age of all employees is 42.7 years (43 for menand 35 for women), with the average length of employmentbeing 20.3 years (at December 2004). We actively promotewomen to managerial positions, and there were 42 womanmanagers in December 2004, up four from the previous year.

Asahi Glass has two committees, the Human ResourcesManagement Committee (HRMC) and the Human ResourcesDevelopment Committee (HRDC), to support decision-makersin employee assignments, evaluation and compensation.HRMC focuses on senior managers, while HRDC focuses onmanagers and non-managers. These committees review thedirection of HRM, and line managers, based on the feedbackof the committees, assign jobs and missions to employeesaccording to the capability classification.

Infrastructure of HRM System

*2 We understand the need to comply with the statutory employment ratio (1.8%) from the viewpoint of social responsibility and are determined to achieve the set rate.

Average age: 42.7 yrs (43.0 yrs for men; 35.0 yrs for women)Average length of service: 20.3 yrs (21.0 yrs for men; 12.1 yrs for women)No. of temporary/contract employees: 268Disabled as a proportion of the workforce: 1.6% *2Prescribed working hours: approx. 1875.5 (annual); 7 hrs 45 min (per day)Average overtime worked: 11.5 hrs (per month)Proportion of annual paid leave taken: 88.9% (17.7 days for average union members)

Group

Managers

E Course

S Course

C Course

Total

1,558

575

3,250

0

5,383

Women(In-house)

42

69

31

361

503

Total(In-house)

1,600

644

3,281

361

5,886

Men(On loan)

831

163

370

0

1,364

Women(On loan)

9

8

1

85

103

Total(On loan)

840

171

371

85

1,467

Men(In-house)

Employee Data (Asahi Glass, noncosolidated)

CEOCEO

Well-planned development(assignment, training)

Iden

tific

atio

n an

d s

elec

tion

Utilizatio

n

Information sharing

Global HRM

Objective

Enhance AGC Group competitiveness

Human resources of the AGC Group

Group employees: about 56,800Japan: about 15,100Asia/Pacific: about 17,000Europe: about 17,600The Americas: about 7,100

The right people are assigned to key Group positions at the right time.

Group management

Outline of Global HRM

Employee Satisfaction (ES): Employee JobSatisfaction and Pride in AccomplishmentGlobal Development of Human Resources and Personnel System

CSR Report 2005 21

Diversity

The AGC Group has a fair HRM system with no bias in terms of to nationality or ethnicity in developinghuman resources, the driving force of our corporate power, in order to realize an integrated managementsystem for all our operations across the world. The keywords for human resources development areselection and self-reliance. We offer training to our employees to encourage them to acquire globalleadership capabilities and educational opportunities that take into account their own individual capabilities,aptitude and willingness. Please see pages 52 and 53 for occupational health and safety.

Asahi Glass uses the Mission & Achievement ManagementProgram (MAP), an in-house scheme to ensure achievementof the stated targets of the organization throughmanagement of missions and objectives. To be specific,MAP makes a fair evaluation of the degree of contribution anindividual employee makes to the organizational performancebased on how much the employee has achieved the missionor target set based on the policy of the president, division orsection. MAP consists of a series of processes, such asassignment of missions, setting of objectives/targets,formation of action plans, progress review and performanceevaluation, and the processes are implemented annually.

We train and develop people based on two key concepts:selection and self-reliance. Our system, therefore, isdesigned to match the employee’s role or function,regardless of their length of service.

Training/Development System

Individual training is provided to all employees on the ECourse (non-managers) and managers. They have a talk withtheir superior, a process known as “human resourcesdevelopment communication,” before taking the training. Theline leadership education is provided for the S Courseemployees to enhance the technical capability of theproduction line. Managers also take manager trainingcourses, including the Management Program for SeniorEngineers or the Management Program for Senior Marketers,go on to receive educational programs for executivecandidates at the AGC Management College, and areassigned to important positions. Our career developmentsystem provides career design assistance, self-developmentsupport and selective development programs.We will prepare a training/education and career developmentsystem that suits each trade or job and the capabilities andrequests of each employee across the entire AGC Group toenhance the basic capabilities of our human resources.

Career designassistance

Support autonomous planning for self-development• Career design training, etc.

Human resources development

communication

Provide opportunities for an assignment or training that matches the individual aptitude and for regular communication with superiors about career development

• HDC, meeting with superiors using communication sheet, etc.

Self-developmentsupport

Support independent and voluntary training• Communications training • E-learning • Course for external school • Internal training courses

Selectivedevelopment

Target key people in areas of high importance or urgency• AGC Management College • Advanced technical course • Advanced sales course

Challengingcareers

Help employees take the initiative in taking the job that can make the most of their skills, for assignment of the right people to new projects or to reinforce businesses and for greater organizational vitality• In-house voluntary recruitment system • In-house free agent system

Specialistcareer paths

Utilize employees who are excellent in very advanced skills as specialists for optimum evaluation and rewards• Specialist course

ManagersNon-managers


Non-managers

Car

eer

pla

nnin

gD

evel

op

men

tIn

-ho

use

care

er c

hang

e



Managers

Career and Skills Development

♦Non-managers on the S Course

♦Managers

Training to enhance productive techniques and skills of production line leaders

Production line leader training

3 days/month for 6 months(24 people per year)

Management Program for Senior Engineers aimed at developing new project leaders *1

Management Program for Senior Marketers aimed at developing marketing leaders *1

MBA/Law school, etc. Dispatch a few employees to business school or law school in Europe or the USA (for MBA courses, etc.)

1. Lectures on management philosophy, etc.2. Action learning on management reformation tasks

For development of executive candidates *1

Self-development support: Introduction to internal/external schools and programs plus grants (¥120,000 a year per person)

Support for all managers and non-managers

Basic training: Training in basic common knowledge necessary for all Asahi Glass employees (e.g. compliance)

*1: Both programs are held 3 days/month for 10 months with about 20 people per year.

Reinforcement of the roles and functions: to reinforce functions necessary for job and systematically improve capabilities (E Course)

Assign to important positions

AGC Management College

Selection

Self-reliance

Training/Development System

Processes

Recruit

Assign and develop

Evaluate andreward

Others

To strengthen the individual

To create a culture in which we can enhance our competitiveness and improve on our result-oriented mindset

To develop and utilize people to respond to improvements in globally integrated management

To establish a culture and environment in which diverse people with different employment patterns and approaches to their jobs can demonstrate their abilities

Recruitment of new graduates emphasizing competency and diversity

Mid-career recruitment

Selective benefits package

Self-development support

HRM system for managers

HRM system for non-managers

Course changeGroupwide Human Resources ManagementAssign the best people to the right positions

Bonus system based on operating performance (certain managers and above)

Objective

Challenging careers Flextime system with no core working hoursSelective HR development HR development program for

subsidiaries in Japan

Relationship Between Policies, Systems and Measures

Creating a Sound and Comfortable Work Environment

Asahi Glass is developing systems in which people in adiversified and capable workforce can fulfill their abilities andfurther improve them. Moreover, we aim to create a culture inwhich all employees can work in a discrimination-free, sound andcomfortable work environment with national, regional, ethnicaland cultural differences of employees fully respected.

Diversity

CSR Report 200522

Asahi Glass has in place the “Challenging Career System,” aflexible in-house career change scheme, to help employeesmake the most of what they have and carry out theiractivities with full satisfaction.The system is a two-part scheme, an in-house voluntaryrecruitment system and an in-house “free agent” system.The scheme helps employees take the job that makes thebest use of their skills of their own volition, thereby allowingthe right people to be assigned to new businesses or focalbusinesses for greater organizational vitality.The specialist course system is also available to utilize thecapability of highly specialized people for fair evaluation.

The Human Resources and Administration Center has aspecial section for human rights education and training tohandle human rights issues for the entire AGC Group andpromote the establ ishment of sound and fair workenvironments free of discrimination. Respect for humanrights and the prohibition of discrimination are explicitlystated in the Asahi Glass Code of Conduct and Asahi Glassemployee regulations. These principles are also shared by allemployees through our periodic training programs.Concerning sexual harassment, we run a counseling serviceand a hotl ine system as an accessible route ofcommunication for any potential harassed employees andlose no time in acting to stop any harassment. In addition,we make efforts to prevent unintentional harm being causedto others by institutionalized gender discrimination, asituation whereby people are unconsciously biased againstrecognizing another gender as an equal partner in theworkplace. Reported cases are treated through the

Human Rights Education and Training

Career Developmentretraining of perpetrators combined with an emphasis onreforming the consciousness of the whole workplace.

The policies guiding our benefits packages are:

(1) Enrich individuals through self-selection and personalresponsibility

(2) Maintain fairness among people and address theirchanging needs

Based on these policies, we have operated a selectivebenefits package system (cafeteria plan) called “My Story”since 2002. This point-based system allows employees tochoose from 25 menus of options which suit their needs,such as retirement, education, or child-rearing. They canreceive up to 1,200 points per year, with 1 point equal to¥100 in value.Besides the optional menus, we also support the care ofchildren or family members. The childcare leave system atAsahi Glass allows employees to take leave until their childreaches one year and six months old. Other systems permitemployees to take up to 12 months’ leave to care for familiesor to work part-time for child or family care. After taking childcare or family care leave, employees are able to resume thejob they had when they left.

Employee Benefits

No. of people 31 28 35*1 28 35

2000 2001 2002 2003 2004

In-house voluntary recruitment systemSpecialist Career Paths

• System for utilizing and properly evaluating certain employees as high-level

specialists instead of as line managers.

• Applicable to senior managers and managers. Applications are submitted and authorized once a year.

In-house “free agent” system

EmployeesEmployees CompanyCompany

•Each division can advertise targeted positions on the Asahi Glass intranet to recruit voluntary employees willing to move to and assume those duties.

•Positions are open to non-managers (E, S, C Courses) and managers who have worked at Asahi Glass for at least 4 years (conditions depending on the position).

•Positions are posted once a month.

•Employees can apply directly to move to a certain division through interviews and appointments. Applications are sent directly to the head of the relevant division.

•This system is open to E Course employees and managers who have worked at Asahi Glass for at least four years.

•Applications can be submitted at any time.

Challenging Career System Path Change

Employees taking child care leave

*1 including one male employee

No. of people 0 1 1 0 0

2000 2001 2002 2003 2004

Employees taking family care leave

Career Changes

CSR Report 2005 23

The AGC Group defines compliance as “following laws andregulations as well as social codes and rules, includingbusiness ethics, in carrying out business activities.”Compliance efforts lead us to “Integrity” in the GroupVision .

Integrity

Compliance

The AGC Group has established a global compliancesystem, consisting of the Compliance Committees inJapan/Asia Pacific, Europe and the Americas. Each headedby a chairman, the three committees ensure compliance intheir own region, while gathering information from In-houseCompanies and SBUs in their grounds.Newly added to this global system of compliance is thepost of Global Compliance Leader (GCL), which wasassumed by the Senior Executive Vice President of AsahiGlass, who also chairs the Japan/Asia Pacific ComplianceCommittee. GCL gathers information from the threeregional through monitoring, regularly provides reports tothe President & CEO in charge of legal compliance, andenhances the level of compliance for the entire AGC Groupby determining the problems and issues in each area.We also formulated the Compliance Reporting Guidelinesearly in 2005. Laws and regulations to be complied withvary depending on the nation, culture and commercialpractices. Working Office members of the three committeeshave clarified the standard and route of reporting withrespect to information on compliance violations that shouldbe swiftly notified to top management by listing up thevarious possible compliance-related risks, including thosefor which we must be responsible as a corporation or as anindividual.The three-part Compliance Program, consisting of the

Global Compliance Organization LaunchedCode of Conduct, the Help Line, and the ComplianceCertificate, has been introduced across the entire AGCGroup. The European version of the Code of Conduct wasput together in 2004, in the last of the main three regions inthe world. The overseas Codes of Conducts, whichappropriately incorporate the laws, regulations andpractices applicable in each region, are in line with AsahiGlass’s Code of Conduct that was fully revised in 2003.The Compliance Help Line system is undergoingimprovement to cope with the unique characteristics ofeach region. For instance, many in Europe found it difficultto contact the line for consultation or reporting by means ofe-mail or letters, and in response, a total of 14 compliancemanagers, two in each of the seven major countries, wereassigned to ease the route of contact.The compliance cert i f icate system has also beenintroduced at the sites of our major operations throughoutthe world. As of December 2004, all of the 1,453 maincareer track employees in North America and 50 executiveclass employees in Europe submitted their signedcompliance certificates to the chairman of their respectiveCompliance Committees.True to the pledge of “Integrity,” the ComplianceCommittee is determined to establish a system to promotethe process of PDCA in compliance at the international levelso that all employees, carry out compliance-based activitieson global basis.

Monitoring

Information on material violations

Monitoring

Monitoring Monitoring

Flat glass SBUs*1

Europe Compliance Committee

The Americas Compliance Committee

Japan/Asia Pacific Compliance Committee

Global Compliance LeaderSenior Executive Vice President Matsuzawa

Working Office: Internal Audit Division

Periodic reporting

Total information gathering routeMonitoringViolation information route

ChemicalsDisplay

TO CC

Automotiveglass

Information on material violations

ChemicalsAutomotive

glass

Board of Directors

CEO Kadomatsu↑

Global Compliance Organization


Asahi Glass established guidelines governing the Code ofConduct in April 1998 and pledged that we will not carry outany illegal or anti-social activities, nor allow them to occur.This pledge was reflected in “Integrity,” one of “Our SharedValues” established in the Group Vision “Look Beyond” inApril 2002 and has become the Code of Conduct applicableacross the entire AGC Group after major revision.The booklet “Look Beyond - Our Principles and Code ofConduct” starts with “You must never do any activities thatare illegal.” It is given to all employees and explains theprinciples based on “Our Shared Values” shown in thegroup vision. The Code of Conduct puts the principles intopractice, and all systems and organizations ensurecompliance with the Code of Conduct and help employeesto attain understanding and self-awareness. The bookletalso provides action guidelines for varying situations,including laws and regulations that must be complied with,relationships with customers, relationships with contractors,subcontractors and suppliers, and relationships withcompetitors, so that employees can readily get advicewhenever they face problems during daily activities.In September 2004, we distr ibuted a Q&A withCommentaries for Our Principles and Code of Conduct toall employees. This illustrated booklet assumes varioussituations that AGC Group employees face and specifieswhat they are recommended to do and not to do in thosesituations. Information related to compliance is alsoprovided to employees over the intranet in response toinquiries, questions and requests for advice received everyday from employees.

Code of Conduct as the Basis of Compliance

Asahi Glass’s system to promote compliance wasestablished in April 2002. The President & CEO assumedthe role of Chief Compliance Officer, and under him theCompliance Committee was set up, chaired by the SeniorExecutive Vice President and with the Internal Audit Divisionserving as the Working Office. The committee membersinclude group leaders that head up the variousdepartments and centers, such as legal affairs or audit. Thecommittee is held at least twice a year for reporting andexchanging information.The Compliance Committee is overseen by the Board ofDirectors. Opinions from a variety of viewpoints areexpressed by board members, including externalexecutives. Compliance officers are also assigned tovarious divisions of the head office and branches and plantsto help to spread and encourage observance of the Codeof Conduct. External consultation with outside lawyers isalso available to ensure compliance.The staff of the Internal Audit Office, Working Office of theCompliance Committee, are busily engaged in promotingthe three mainstays of the Compliance Program: the Codeof Conduct, the help line and the compliance certificate,checking how use of the Code of Conduct is spreading,and investigating and correcting where necessary.

Asahi Glass’s Compliance Help Line is a system that allowsall employees and external concerned parties to contactthe Compliance Committee or other appropriate parties for

The Compliance Help Line

System to Promote Compliance

Three regional versions of the Code of Conduct Q & A with Commentaries for our Principles and Code of Conduct (Japanese)

Integrity

CSR Report 200524

Japan

The Americas

Europe

CSR Report 2005 25

Integrity

notification or consultation by email, telephone or mail.Whenever an employee f inds some activity that issuspected of violating the Code of Conduct, they shouldbasically go to their superior to report and consult. If thisstandard approach is unavailable for some reason, they canuse a system outside their own immediate organization,which can be a similar system outside the company. Wehave a consultation service with external lawyers or womanspecialists ready with advice so that employees can getanswers to their problems, including complaints orconcerns on sexual harassment and other work-relatedissues.Employees should give their real names in principles whenreporting or consulting. The Working Office always providesfeedback to the informants contacted via the help line.Confidentiality is guaranteed for informants who giveinformation, so no names or information shared will be letout or disclosed to any relevant party. No negative orunfavorable treatment is given to informants. If by anychance the informant experiences some retaliatory action,the retaliator will be disciplined as stipulated in theemployment regulations.When a problem is unearthed through anonymousreporting, it will be taken up in meetings or notified toemployees as evidence of ongoing improvement so that theresult can be known by the anonymous informantsomewhere in the company. Matters that are the subject ofthese reports and consultations are periodically brought tothe attention of the Chief Compliance Officer, or President& CEO. This system has already born fruit, leading toimprovements to the Help Line consulting and organizationand correction of the mere superficial system.

In 2004, hoping that small talk could bring seriousproblems to light, the secretariat visited plants andworkplaces to explain about and to encourage use of thehelp line, asking people to feel free to contact the WorkingOffice for consultation.We also made a revised version of the portable compliancecard, which folds down to name-card size, and distributedit to all employees. The card, which summarizes specificproblems and cases discussed, the contact point, the flowof consultation, and the Code of Conduct, is compactenough for employees to carry in their ID holder.As a result of these measures, the number of items thatconsulted through the help line soared from one or two peryear before the revision of the Code of Conduct and oneper month after the revision in 2003 to three per month in2004. After the measures, the percentage of namedconsultations also soared from 25% to 60%. Use of theexternal lawyers’ office and sexual harassment hot line alsoincreased. The Compliance Help Line has thus beenaccepted by employees as a reliable means of compliance.

An activity that violated the Code of Conduct was carried out

Interview and investigation by the compliance officer

Judgment on whether the activity violated the Code of Conduct

Recommendation for correction and notification to the parties involved

Monitoring the result

Reporting to the Chief Compliance Officer and the Compliance Committee

Writing up case notes to remove references to specific people and disclosing it in-house

Action taken in line with the employment regulations or others

Hot line to compliance officers or external lawyers(in the latter case, interview and investigation)

Procedure for Using the Help Line

Compliance Page on the Intranet (Japanese)

Integrity

CSR Report 200526

This is the pledge from the annual compliance certificatethat is signed and submitted by the employee to theexecutive off icer in charge of legal compliance. Al lpersonnel are required to sign and submit this certificate viathe intranet, e-mail or mail. Unlike a written pledge that isrequired to be signed to protect the company or the topmanagement as often used in the US, our compliancecertificate is regarded as an essential tool in encouragingthe signatory to read the Code of Conduct again, be awareof what they represent, and to ensure that they fully complywith them, in addit ion to being a statement of thecommitment made between the employee and theexecutive officer in charge of legal compliance.A special feature of the compliance certificate is that spaceis provided for comments from the signing employee, undera header that says “If you have something that you need todiscuss with us, please write it down here.” In 2004, 45signatories made comments on their certificates. Thesecomments are sent to the President & CEO, in the sameway as for the compliance help line, and each individualemployee who makes a comment receives a reply. Sincereand honest replies to all employees who leave commentsor write down their opinions is the key to full compliance.

I have received and read the Asahi Glass Code ofConduct booklet. As an employee of Asahi Glass, Iunderstand and acknowledge that I am required tocomply with the Code of Conduct.

I pledge to fully comply with the Code of Conduct.

“Compliance Certificate” Signed andSubmitted by All Relevant Personnel

In 2003, only managers and executive officers wererequired to submit the certificate, but in 2004 the rosterwas expanded to include general employees andpresidents of consolidated subsidiaries directly run by AsahiGlass, including those overseas. The Working Office gave atotal of 27 circuit presentations, mainly to new signatorycandidates, in which they explained the purpose and gist ofthe compliance certificate. The number of signatoriesincreased by about 1,400, from 2,415 in 2003 to 3,796 in2004 (in 2004 all personnel listed in the roster wererequired to submit the certificate). The Working Officeintends to gradually enlarge the roster.

In 2004, to deepen understanding of the Code of Conductamong employees, a quiz was given to young employeeswho joined Asahi Glass within the last two to three years tocheck how well they understood the Code of Conduct. Thequestions include “Please choose the answer that correctlydescribes the scope of application of the Asahi Glass Codeof Conduct.” These questions are not difficult to answer ifthe employee has read the Code of Conduct well andattended a compliance presentation.The quiz was started through a suggestion by one of theexternal executives. As it is an appropriate tool to gaugethe level of understanding of compliance, we intend toincorporate the quiz results into our future educationalprograms.

Quiz for Understanding the Code of Conduct

Compliance Card (Japanese)

CSR Report 2005 27

The AGC Group is making a united effortin environmental activities in line with theAGC Group Basic Environmental Policy.

Environment

AGC Group BasicEnvironmental Policy and Promotion Structure

Basic Policy

Aware that its activities use relatively large amounts of resourcesand energy, the AGC Group has settled environmental activities asone of the core values in our group vision . Asa leading company in the materials industry, we shall contribute tothe creation of the sustainable society.

Slogan

Play your part as a responsible citizen in creating a betterenvironment.

Guidelines for Environmental Activities

1. We wil l make continuous improvements based on theIntegrated Environmental Management System.

2. We will comply with all regulations and standards prescribedby environmental laws, ordinances, treaties and agreements.

3. We will take steps to lower various forms of environmentalimpact and prevent pollution in every stage of our operations,while setting voluntary targets in a variety of areas, especially inrespect of resource conservation, grobal warmingcountermeasures, waste reduction and recycling, and theproper handling of chemical substances. We will work toaccomplish these goals while making further improvements.

4. We wil l develop and provide eco-conscious products,technologies, services and facilities for society in all areas ofour activities.

5. We will actively communicate with society to foster a deeperunderstanding of all aspects of our environmental managementactivities.

AGC Group Basic Environmental Policy Revised on December 18, 2003

The AGC Group Basic Environmental Policy is disclosed to the public.

AGC Group organization for environment, occupational health & safety and industrial safety & security


Board of Directors ManagementCommittee

Group CorporateCorporate Environment &

Safety Directorate

Environmetal & Social

Responsibility

In-house Companies, SBUs*1

Environment & Safety Office

Plants, Affiliates

Environment & Safety Office

The AGC Group positions “Environment” as one of thefour Shared Values stated in the Group Vision “LookBeyond.” In the Vision we state that we will shoulder ourresponsibilities as a good global citizen by contributing toa sustainable society in harmony with nature.Implementation of specific environmental conservationactivities is carried out in line with programs based on theAGC Group Basic Environmental Policy.Environment is not our only concern. Occupational health& safety and industrial safety & security measures are alsoput into effect using the following organization for

environment, occupational health & safety and industrialsafety & security.Coinciding with the introduction in 2002 of our In-houseCompany system, – a three-tier organizational structure –consisting of Group Corporate, In-house Companies/SBUs*1,and branches, plants and affiliated companies, started todeal with the environment, occupational health & safetyand industrial safety & srcurity, with a dedicated body ineach organization held responsible for those safety-relatedmatters within their remit.

Fiscal 2004 Plans, Results and Evaluation and Fiscal 2005 Plans

Environment

CSR Report 200528

Environmental management

Fiscal 2004 AGC Group Environmental Improvement Promotion Plan Major fiscal

Establishment of an Integrated Environmental Management SystemPreparation of a road map for the scope of global integrationDevelopment of the basis for an environmental information database

Development of a sustainable society,Reduction of environmental impact

Establishing the Integrated EMS in

Classification of self

Making further progress toward Zero Emissions (aiming to achieve at the end of fiscal 2005)

Asahi Glass achieved recycling target 95.4%

Global warming countermeasures and energy saving measures (target set for execution by the Environmental Committee)

Asahi Glass reduced CO2 emissions target of 2,236 thousand tons, down

Decontamination of polluted soil and groundwater Voluntary site surveys and continuously carried out

Proper management of chemical substances, reduced chemical emissions, reduced toxic atmospheric and water emissions

Specific measures taken, including fluorocarbon, destruction and

Energy saving and environmental activities in the logistics field Specific measures taken, including and recycling of packaging materials

Response to new issues

Responses to new issues, such as emissions trading and environmental tax

Started in-house review for the

Improvement of environmental accounting and feedback to top management Continuous evaluation and analysis

Promoting the environmental business Continuous development and

Actions related to LCA (active participation in LCA together with customers) Actions matching the characteristics

Green procurement (raw materials, components, etc.) Continuous actions matching the

Green purchasing (office equipment and supplies, etc.) Green purchasing ratio of 96%

Information disclosureand communication

Issuing a sustainability report Sustainability Report 2004 issued

Intranet: to develop to use of the environmental & safety website by the group Scope of access expanded to affiliates

Internet: improvement of the Asahi Glass website (environment section) The environment section pages Report 2004

AGC Group Environmental Forum: Promotion of environment-related communications inside the AGC Group

Disclosed specific activities being affiliates

Apply for CEO’s awards and external environmental awards Energy Conservation Center Japan

CSR Report 2005 29

Environment

2004 results Fiscal 2005 AGC Group Environmental Improvement Promotion PlanSelf-evaluation

A 1. Continuously Improving Integrated EMS and its application to affiliates in and out of Japan

a. Expanding the scope of Integrated EMS in and out of Japan and steady implementation of PDCA (1) Expanding the scope of coverage to affiliates in Japan (basically all

domestic affiliates should participate by the end of 2005)(2) Establishing the basis of Integrated EMS for overseas affiliates

b. Setting long-term objectives and improving environmental performance

2. Reducing environmental impacts and preventing pollution

a. Items for improvement • Reducing GHG emissions• Waste: expansion of Zero Emissions coverage • Chemical substances: Proper management and reduction in emissions to

air and water b. Items for maintenance

• Air and water: planning and action based on the idea of local community and the long-term viewpoint

• Soil and groundwater: developing and implementing measures based on the long-term viewpoint

3. Actively promoting positive environmental activities

a. Review of response to the enactment of the Kyoto Protocol b. Review of internal environmental accounting as a managerial index c. Planning and promoting the environment business d. Promoting Green Procurement (including appropriate response to customers’

requests) and Green Purchasing

(Environment-related issues listed in JIKKO-2007 other than above)

1. Response to globalization2. Changing culture and employee mindsets and promoting communications

B

Asahi Glass Co., Ltd.

-evaluation A: satisfactory; B: almost satisfactory; C: not satisfactory

ratio of 94.8% against the 2004

Bby 2,253 thousand tons against the 2004 34% over the 1990 level (nonconsolidated)

A decontamination programs

A full-scale commencement of recycling system

Bintroduction of low-emission forklifts

B Kyoto Protocol upon its taking effect

Aof environmental accounting conducted

Apromotion of energy component conducted

C of each business taken

A characteristics of each business taken

A achieved for fiscal 2004

B

Aupon establishment of Integrated EMS

Crevised in line with Sustainability

A carried out by AGC Group overseas

B Energy Management Achiever Award

The AGC Group follows the AGC Group Basic Environmental Policy and the AGC Group EnvironmentalImprovement Promotion Plan, under which each In-house Company and SBU*1 carries out their ownenvironmental activities. In fiscal 2005, the new mid-term management plan, JIKKO-2007, commits all ofus to attaining the goals of environmental conservation in line with the AGC Group EnvironmentalImprovement Promotion Plan.


Environment

CSR Report 200530

Relationship Between Asahi Glass Business Activities and the Environment

Asahi Glass continuously monitors,gathers and collects data onenvironmental performance. Thedata gathered is used to helpdevelop plans to implementenvironmental improvements.

Relationship between Environmental Impact and Asahi Glass Sales in Japan

The market share of Asahi Glass in Japan and theratio of environmental impact materials emitted byAsahi Glass to total emissions for Japan areshown in the table on the right.Air pollutants, including CO2, SOx, NOx, and sootand dust, increase with the rise in the marketshare. This is because these materials aregenerated from consumption of fuel oil used inmelting the glass raw materials. We continue oureffort to reduce these emissions by installing new,and improving existing, energy-saving equipmentand desulfurization and denitration equipment.

INPUT OUTPUT

OUTPUT

Water consumption

Total energy consumption

Manufacturing Asahi Glass (parent company)

Fuel oil: 310 million litersElectric power purchased: 2.3 billion kW

39

Sales

Flat glass

Display

Flat glass

Display glass

ChemicalsChemicalsChemicals

Chemicals

Electronic materials

ElectrElectronic materials onic materials

Automotiveglass

Automotive glass

Others

Water

AirIndustrial wasteIndustrial waste

Scope of data:

Totals do not always match the sum of the individual figures because of rounding.*1 PJ (peta joule) = 1015 joule

all Asahi Glass operating sites (including the data of former Building Materials Division (currently Asahi Tostem Exterior Building Materials Co., Ltd.) separated from Asahi Glass in December 2004)

PJ*1

Raw materials purchased

Industrial raw materials, including silica sand, soda ash, salt, fluorite and potassium chloride

CO2:

NOx:

SOx:

Soot and dust:

2,253,000 tons

3,686 tons

819 tons

110 tons

Total generated:

Recycling:

Sent to landfill:

213,000 tons

202,000 tons(94.8% recycling ratio)

11,000 tons

Total wastewater

volume:

COD:

25 million m3

809 tons

180 million tons

579.9 billion yen

Total

37million m3

Electronic materials

Source: Website of the Economic and Social Research Institute, Cabinet Office, Government of JapanEnvironmental burden: Environmental Statistics 2005 (Ministry of the Environment)except for those environmental load items not found in any 2004 statistical data, for which the latest relevant data were used

Asahi Glass (parent company, 2004)

Ratio of Asahi Glass (parent company) to total for Japan

Sales

CO2

SOx

NOx

Soot and dust

COD

Waste finally sent to landfill

579.9

2,253,000

819

3,686

110

809

11,146

billion yen

tons

t

t

t

t

t

0.11

0.17

0.14

0.43

0.18

0.05

0.03

%

%

%

%

%

%

%

CSR Report 2005 31

Environment

Environmental ManagementSystem

The AGC Group is working on establishing anEnvironmental Management System (EMS) based on ISO14001. At the end of March 2005, a total of 72 operationsites of the Group acquired certification, which accounts for39% of all the Group’s production sites around the world.The effort of each site in acquiring the ISO 14001certificate gives only one picture of what we are doing forthe environment; we started the challenge of EMSintegration to ensure global compliance withenvironmental conservaion.Integrated EMS is a system where a single environmentalmanagement system is shared by the entire AGC Groupwith top management of the AGC Group leading theoverall effort. Put another way, it is a framework thatmatches the f low of business activit ies to ourenvironmental activities.Integration of EMS was set as the target in 2002, and inDecember 2004, the EMS was integrated for AsahiGlass’s parent company, including the divisions atheadquarters.Domestic affiliates of the AGC Group started to join theIntegrated EMS in 2004. Overseas affiliates also beganparticipation in 2005. It is our plan to include overseasAGC Group companies in this single integrated EMS in2006.In January 2005, we formulated the AGC GroupEnvironmental Principles, which contains guidelinesinstructing AGC Group companies yet to join IntegratedEMS what environmental actions they should implement.

EMS Integration Extended to Subsidiariesand Affiliates in and out of Japan

In 1994, the AGC Group started an environmental auditwith the Corporate Environment & Safety Directorateassuming the role of the main auditor. With the shift to anIn-house Company system, the audits have focused on In-house Companies or SBUs since 2003.Intending to clarify problems and improve environmentalperformance, environmental audits verify the effectivenessof the PDCA cycle depending on the status ofenvironmental activities and institute corrective measures ifany nonconformity are found. All operating sites of theAsahi Glass parent company and our affiliates controlledby In-house Companies or SBUs are audited mainly by In-house Companies or SBUs.

The AGC Group is engaged in various kinds ofenvironmental education, including highly specializedtraining intended for acquisition of environment-relatedqualifications, and forums and lectures intended forgeneral employees. At In-house Companies and SBUs,environmental education is provided for their ownspecialties or businesses including products or productionprocesses. The AGC Group Environmental Forum, held once a year,invites external lecturers for keynote speeches andpresents case studies of actual efforts and measures doneby Group companies for greater environment-relatedcommunication within the AGC Group and to encouragethe sharing of information.The Forum in 2004 successfully promoted the sharing ofinformation on an international level as participantspresented environmental efforts in Japan, Thailand andPakistan.

Environmental Education

Environmental Audit of the AGC Group

LocationNo. of

production sites

*2 For sites with ISO14001 certification for Asahi Glass (parent company), the Susono plant of the Lucina Business Development was counted as one site.

10

65

31

24

54

184

10

21

17

5

19

72

(10)

( 2)

( 0)

( 0)

( 0)

(12)

Asahi Glass (parent company)*2

Affiliates In Japan

Asia/Pacific

The Americas

Europe

Total

No. of certified sitesNumbers in parenthesis indicate sites

incorporated into Integrated EMS

AGC Group’s ISO 14001 certification

Training subjects Participants

EMS internal auditor training course

Environment Seminar

AGC Group Environmental Forum

55

92

107

Major environment-related training for domestic AGC Groupemployees (those organized in fiscal 2004 by the Environmentand Social Responsibility)

To the AGC Group, “Environment” is one of our most importantoperational issues. Since 2002, the Group has been integrating ourenvironmental management system (EMS) so as to ensure anintegrated approach to environmental issues across the Group. In2004, integration of EMS was completed for Asahi Glass, and weintend to apply it to the entire AGC Group worldwide.

Environment

CSR Report 200532

Eco-Friendly Products and R&D

In the AGC Group Vision “Look Beyond”, the Group setsout a business portfolio for sustainable growth, specifyingglazing, display, and electronics and energy (E&E) as themajor business areas to channel resources to. Of thethree, E&E is based on our proprietary glass and fluorinechemistry-related technologies and has a promisingfuture. It is this field that is being strengthened from theground up as the next mainstay of the display business.Energy components is a particularly essential field for itscapabi l i ty to contr ibute to improving the globalenvironment, since those components are brought toconsumers together with eco-friendly technologies, suchas energy saving and clean energy. This report picks outtopics that are drawing particular attention.

Environmental Contributions Achieved by Glass Technology

Solar cells are a clean new energy resource for powergeneration that can replace fossil fuels. The market forsolar cells seems to be continually expanding now. Thecurrent mainstream technology is crystal silicon solar cells;however, it is expected to become more and more difficultto procure the special silicon, the main material of thesolar cells, after a few years. An attractive alternative isoffered by thin film silicon solar cells, which use only aboutone 100th the amount of silicon in a typical crystal silicon

Looking for a Solar Cell with ExcellentResource and Cost Savings—TransparentConductive Oxide Film (TCO) Substrate forThin film Silicon Solar Cells

solar cel l and are thus far less dependent on theavailability of resources. The thin film silicon solar cell isregarded as the key technology to promote the spread ofsolar cells with low-cost.The issue to be solved is that the thin film silicon solar cellhas lower efficiency in converting the optical energy of thesun into electric energy than the crystal silicon solar cell.Asahi Glass developed type-U transparent conductiveoxide (TCO) films that have established a favorablereputation as a core material for the thin film silicon solarcell. Sufficient light trapping efficiency, high opticaltransmittance and lower resistance of TCO films couldlead to high conversion efficiency of the thin film siliconsolar cell. Using the same coating technology, the AsahiGlass Research Center is continuously working ondeveloping the next-generation of TCO substrates that willenable thin film silicon solar cells to have higher conversionefficiency.Since the conventional TCO does not have a sufficientlight-trapping efficiency at long wavelength, we havedeveloped new type TCO with unique texture achieved bythe CVD (Chemical Vapor Deposition). The new type TCOfilms can now effectively collect incident light across widewavelength from visible light to near infra-red.Now that we can successfully enlarge the size of this newTCO substrate at a lower cost, we expect to make greatimprovements in the performance of the thin film siliconsolar cell.

Crystal siliconsolar cells

Thin film siliconsolar cells

Glass (mm)Glass (mm)

Transparent conductiveoxide film

Thin film siliconlayers (~ 250µm)

Encapsulant

Back electrode

Silicon wafer (~ 250µm)

Uses the atmospheric pressure CVD method to deposit thin oxide atoms

Next-generation Next-generation GrGrowth owth BusinessesBusinesses

Businesses with HighBusinesses with HighPrProfitability andRapid GrRapid Growthowth

Businesses with Steady GrBusinesses with Steady Growthowthand Good Cash Generationand Good Cash Generation

Next-generation Growth Businesses

Businesses with HighProfitability andRapid Growth

Businesses with Steady Growthand Good Cash Generation

Glass, Fluorine Chemistry and their Related Technologies Global Presence

RobustManagementInfrastructure

Electronics & Energy- Optoelectr- Optoelectronics Components onics Components

- Energy Components- Energy Components- Optoelectronics Components

- Energy Components

Electronics & Energy Display- Display Glass

- Display Components- Display Components- Display Glass

- Display Components

DisplayElectronics & Energy Display

Glazing

- Architectural Glasschitectural Glass- Automotive Glass- Automotive Glass

GlazingGlazing

- Architectural Glass- Automotive Glass

- Optoelectronics Components - Energy Components

- Display Glass- Display Components

- Architectural Glass- Automotive Glass

Crystal silicon solar cells and thin film silicon solar cellsThe Three Major Business Areas Envisioned for the Future

CSR Report 2005 33

Environment

Environmental Contribution Made by Chemical Technology

Fuel cells are the ultimate clean energy solution forproducing energy efficiently without the carbon dioxideemissions that are thought to be responsible for globalwarming. Take the polymer membrane fuel cell (PEFC) for instance.Its mechanism brings hydrogen, which is a fuel, intocontact with a catalyst formed on a special protonexchange membrane that separates the hydrogen intoprotons (H+) and electrons (e–), and those electrons areused to form an electric current. The remaining protonspass through the proton exchange membrane to becomewater (H20) as they are combined with atmosphericoxygen on the other side of the membrane.The use of fuel cells has traditionally been restricted torelatively specialized areas, such as space travel. Recentadvances in power generation technologies usingfluoropolymer type proton exchange membranes open upthe possibility of developing commercial clean-energysystems, such as home-use co-generation systems,portable electronic devices or even automobiles.Applying in-house expertise in fluoropolymer type protonexchange membrane and electrode technology from theelectrolysis of salt, Asahi Glass has also developed amembrane-electrode assembly (MEA) for use in fuel cellsthat combines the membrane and the electrodes in asingle unit. However, conventional MEAs have one major

Next-generation Clean Energy – Membrane-Electrode Assembly (MEA) for Fuel Cells

shortcoming, which is that they are able to operate onlyunder specific conditions (low temperature and highhumidity) and if these conditions are not met, they cannotoperate because of polymer decomposition.We clarified the causes and mechanism of polymerdecomposition and developed solutions by applying ourcore technology created through our development offluoropolymer type ion exchange membranes used for theproduction of caustic soda (including fluorochemicaltechnology, polymer synthesis technology, membranetechnology, coating technology, and electrochemicaltechnology). Finally, we successfully developed a newmembrane-electrode assembly with high durability even inhigh-temperature and low-humidity environments.In 2004, the world’s first fluoropolymer type MEAssuccessfully achieved continuous operation of over 4,000hours under high temperatures of 120˚C. We have alreadyasked a few automakers to evaluate our MEA so that wecan solve problems that prevent commercialization. Nowwe are working on commercializing MEAs that canoperate under various environments by further enhancingdurability and improving power generation efficiency inlow-humidity environments. We have also started workingon a practical cost-saving technique to boost thecommercialization process.

Area of our development

Proton exchangemembrane

Membrane-electrodeassembly

Fuel cell system

Fuelreformer

Peripheralequipment

Stacking

Stacking

Structure of Membrane-Electrode Assembly (MEA) and fuel cell Membrane-Electrode Assembly (MEA)

A membrane-electrode assembly (MEA) consistsof a proton-exchange membrane and electrodesin a single unit. Sandwiched betweenseparators, these can be packed on top of eachother to form a stack. Together with peripheraldevices, the stack forms a fuel cell system forclean power generation.

The AGC Group is working on developing varying technologies that can reduce environmental impact andprovide environmental solutions for consumers mainly in the fields of electronics & energy.

Environment

CSR Report 200534

Environmental Solution to Meet Global Demand

Accepted as the next-generation of capacitors used tocharge and discharge electricity, the electric double layercapacitor has a great future as a new energy storagedevice for its capability of a quick charge and large-currentdischarge, excellent charging and discharging cycle, andalmost eternal durability. The new electric double layer capacitor developed byAsahi Glass features an energy density (which is theamount of energy stored per weight or volume) almostthree times the conventional level as a result of applyingour own techniques to the electrode and electrolyte. This new capacitor has potential applications in trains,construction machinery, elevators and copying machines.In addition, Asahi Glass is studying full hybrid vehicles asone new application since these advanced energy-savingvehicles are able to exploit to the full the high durabilityand high energy production unique to the electric double

Boosting Energy Efficiency Using High-Capacity Electric Double Layer Capacitor

layer capacitor.More effective use of energy can be achieved by using thenew capacitor to store the kinetic energy dissipated asthese vahicles and machines decelerate and stop,converting it back into electricity, and reusing it aselectrical energy as they start moving again.

100

10

10 1,000 2,000

Power Density (W/kg)

Ene

rgy

Den

sity

(Wh/

kg)

3,000 4,000

High Power Ni-MH

Application to hybrid vehiclesApplication to hybrid vehicles

Applications in UPS systems, train rApplications in UPS systems, train regeneration, and idling stop/start systemsand idling stop/start systems

Conventional EDLC level

Energy-focused targetEnergy-focused target

Output-focused target

High Power Li-ions

Applications in UPS systems, train regeneration, and idling stop/start systems

Performance Target of the High-capacity Electric Double Layer Capacitor

CSR Report 2005 35

Environment

Many regulatory bodies are focusing on the environmentalpollution caused by exhaust emissions from diesel-engined vehicles. High power output and durability makediesel engines a common choice in large commercialvehicles such as trucks and buses. Cheaper fuel pricesand the development of the common rail diesel engine,which combines low fuel consumption with reduced CO2

emissions, have led to the increased use of high-performance diesel engines in cars as an eco-friendlyalternative to gasoline engines. In Europe, 45% of all newvehicles are now powered by diesel engines because ofthe common notion that diesel engines are better thangasoline in terms of environmental impact until thesubstantial spread of fuel cells, the ultimate eco-friendlybattery.But one of the greatest problems with diesel engines is theblack smoke in the exhaust gas emissions. Dieselparticulate filters (DPFs) are an essential tool for diesel-

How to Prevent the Black Smoke Emittedfrom Diesel Vehicles – Diesel ParticulateFilters (DPF)

engined vehicles to meet the very stringent environmentalregulations planned to be enacted in 2008, although someimprovement has been made. Conventional heat-resistantDPFs were developed mainly based on silicon carbide.Asahi Glass used our own technology to produce pluggedhoneycomb substrate (filtration structure with porousmaterial) made of highly heat-resistant silicon nitride frominexpensive metal silicons, and developed new DPFsusing silicon nitride. A patented technique, our DPFs havea number of highly-evaluated features, including high heatresistance, low thermal expansibility, high porosity ratioand high strength. Asahi Glass is working on applying this technology to amuch larger honeycomb structure that cannot be builtusing conventional materials and to systems that requirecoating with large quantit ies of catalysts. Ourdevelopment effort also includes providing samples tocatalyst manufacturers and automakers for performanceevaluation tests to accelerate the process ofcommercialization and establishing mass productiontechnologies.

Structure of Asahi Glass’s DPF

DPF Using Silicon Nitride

Exhaustgasesfrom engine

Trapped soot

Purified gas

Environment

CSR Report 200536

Global Warming Countermeasures andPrevention of Air and Water Pollution

The AGC Group is a global enterprise in the materialsindustry using large amounts of resources and energy. Thetotal energy consumption of the AGC Group in fiscal 2004was 169 PJ*3. The Asahi Glass parent company itselfaccounted for 39 PJ, 2% up on the previous year. With theincrease in energy consumption, CO2 emissions alsoincreased.Past efforts on the part of the AGC Group include theintroduction of glass melting furnaces using the total oxygencombustion method, which uses only oxygen instead of airfor combustion, in countries including Japan, Indonesia andThailand, modification of glass melting furnaces to usenatural gas combustion in regions and countries includingEurope, the Americas, Thailand and Indonesia, applicationof the high-performance ion exchange membrane method

Saving Energy and Preventing Global Warmingin salt electrolysis plants, and step-by-step improvements inenergy saving and global warming prevention for eachproduction line.

Asahi Glass is involved in various activities to reduce theamount of air polluting emissions and to comply with theair control laws and regulations. One of these is thepollution prevention agreements signed with localgovernments at the location of our plants to promotereductions in NOx (nitrogen oxide), SOx (sulphur oxide)and soot and dust emissions.

While it uses copious amounts of water in production, bothas a raw material and for cooling and cleaning purposes,Asahi Glass strives to reduce its water usage and emissionsto protect water resources. Water, including cooling water,used mainly in glass manufacturing plants is recirculatedand reused as part of our effort to save valuable waterresources. When water is used, to prevent any degradationin water quality, the resultant wastewater is discharged afterremoving all toxic substances.

We had two environmental accidents in 2004, whichincluded a complaint from neighbors about the foul smellbeing emitted from the Wakinoura Final Waste DisposalPlant in Kitakyushu in March, and detection of a slight oilfilm near the stormwater discharge vent of the Keihin Sitein November. These accidents were investigated, thecauses were identified, and measures to prevent anyrecurrence taken.

*3 PJ (petajoule) equals 1015 joules

Environmental Accidents in Fiscal 2004

Protecting Water Resources and PreventingDegradation in Water Quality

Reducing Air Pollutants

Asahi Glass (parent)Europe

30%27%

7%

28%

8% Affiliates in JapanThe Americas

Asia/Pacific

Total10,137,000 t

CO2 emissions*5 of AGC Group*4 in fisical 2004

Asahi Glass (parent)Europe

23%24%

8%

37%

7%Affiliates in JapanThe Americas

Asia/Pacific

Total169PJ

Total energy consumption*5 of AGC Group*4 in fiscal 2004

*4 AGC Group (consolidated) covers 80% of sales (note that the scope ofthis graph is different from the graph for last year)

*5 HFC and SF6 are included. Data in countries with no definitive CO2

emission coefficient were calculated using the Japanese coefficient.

0.34

2,210

2,7163,425

2,375 2,2502,1332,1332,187

305361

2,611 2,515

60

50

40

30

20

10

0

(PJ)

56

47

41 4138

3939

6

45

1990 2000 2001 2002 2003*1 2004 (fiscal year)

Asahi Glass (parent)

Subsidiary SBUs

2,253

405

2,735

Changes in total energy consumption of Asahi Glass (parent + subsidiary SBUs*2)

CSR Report 2005 37

Environment

Asahi Glass is actively involved in reducing environmental impacts, including saving energy, preventing airpollution, and protecting water resources, in order to ensure eco-friendly business activities.*1 Data was annualized to correct for the irregular 9-month period in fiscal 2003, caused by a change in the accounting year-end.*2 Subsidiary SBUs: Asahi Fiber Glass, Asahi Techno Glass, Asahi Glass Ceramics, Ise Chemicals, and Optrex

(1,000 tons) (CO2/sales)

Target

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

0.34

0.450.43

0.41 0.40 0.40

CO2/salesCO2 emission

2,210

2,7163,4253,425

2,3752,3752,375 2,2502,2502,1332,1332,187

2,716

2,210

305361361

2,6112,611

305

2,5152,515

2,187 2,133 2,133

39


Subsidiary SBUs

1990 2000 2001 2002 2003*1 2004 2005 (fiscal year)

2,2532,253

405405

2,7352,658

0.34

CO2 Emissions*6 (Asahi Glass (parent + subsidiary SBUs*2))

1995 2000 2001 2002 2004 2005 20060

1000

2000

3000

4000

5000

6000

7000

80007,460

6,455

3,517 3,515

2007

(t)

201

157

237

150

5,760

3,849

2003*1

5,526

4,555

5,526

4,555

1,642

1,421

1,642

1,421

7,168

5,976


Subsidiary SBUs

Target

(fiscal year)

632 526

819

1,6031,411

1,973

632 526

819

1,6031,411

1,973

3,6863,686

1,6721,672

5,357

110

178

NOx Emission (Asahi Glass (parent + subsidiary SBUs*2))

201

157

237

150

5,526

4,555

1,642

1,421

0

3000

2750

2500

2250

2000

1750

1500

1250

1000

750

500

250

1,113

929 873

632 526

819

1,6031,411

1,973

632 526

819

1,6031,411

1,973

2,235

1,937

2,792

821 814 724

1995 2000 2001 2002 2004 2005 2006 2007

(t)

2003*1


Subsidiary SBUs

Target

(fiscal year)

0

3000

2750

2500

2250

2000

1750

1500

1250

1000

750

500

250

1,113

929 873

632 526

819

1,6031,411

1,973

632 526

819

1,6031,411

1,973

2,235

1,937

2,792

821 814 724

1995 2000 2001 2002 2004 2005 2006 2007

(t)

2003*1

Target

(fiscal year)

3,686

1,672

110

178

SOx Emissions (Asahi Glass (parent + subsidiary SBUs*2))

0

50

100

150

200

250

300

350

400

450

500

303

1995 2000 2001 2002 2004 2005 2006 2007

(t)

215

201

157

237

150

201

157

237

150

307

173 172 173

2003*1

5,526

4,555

1,642

1,421

291

438

632 526

819

1,6031,411

1,973

632 526

819

1,6031,411

1,973


Subsidiary SBUs

Target

(fiscal year)

3,686

1,672

110

178

110

178

288

Soot and Dust Emissions (Asahi Glass (parent + subsidiary SBUs*2))

0

20

40

60

80

100

120

140

1995 2000 2001 2002 2003*1 2004 2005 2006 2007

122131

88

27

24

27

25

27

88

27

24

27

51

25

27

24 23 23

109

1,115

1,111

950

1,095

809

1,097

53

115


Subsidiary SBUs

(million m3)

Target

(fiscal year)

Total Wastewater (Asahi Glass (parent + subsidiary SBUs*2))

88

27

24

27

25

27

(t)

0

250

500

750

1000

1250

1500

1750

2000

2250

1995 2000 2001 2002 2003*1 2004 2005 2006 2007

1,313

1,115

1,111

950

1,095

1,115

1,111

950

1,095

1,115

1,111

2,226

809

1,097

809

1,097

821 814

1,284

950

1,095

2,045

724

1,426

1,905


Subsidiary SBUs

(fiscal year)

Target

COD Emissions*7 (Asahi Glass (parent + subsidiary SBUs*2))

*6 HFC and SF6 are not included. See page 13 for HFC and SF6.

*7 COD in the wastewater (before wastewater treatment) sent to thesewage plant included

Environment

CSR Report 200538

Waste Reduction

The AGC Group set up an Environmental Committeeheaded by the General Manager of the CorporateEnvironment & Safety Directorate and composed ofrepresentatives of domestic In-house Companies andSBUs. The Committee sets environmental targets forAsahi Glass (parent) and Subsidiary SBUs*1 andsupervises environmental activities.Currently Asahi Glass (parent company) is engaged in thezero emission movement for effective reductions in waste.The target in fiscal 2005 is to bring the percentage ofwaste sent to landfills of the total waste generation downto below 1%. Put another way, this movement is aiming torecycle more than 99% of waste. The total wastegenerated from Asahi Glass (parent) in fiscal 2004 is213,000 tons, with 11,000 tons of waste sent to landfill,which is a recycling ratio of 94.8%. Although there is notmuch time left, Asahi Glass is making every effort thisfiscal year to reach the target.Take flat glass for example. As it originally has a highrecycling ratio, about 30 to 50% of the materials arerecycled. Glass waste generated from the cutting processduring manufacturing are also recycled. We also buy forrecycling more than 100 tons of reused glass per day fromconstruction companies and glass contractors via culletcontractors. Glass brought in to our sites comes in varioustypes, with some including impurities. Advance samplingis made to check the glass composition for appropriateselection.Sales, administrat ion and sections other thanmanufacturing are also engaged in waste reduction. Forexample, our head office achieved a 2004 recycling ratiotarget of 94%.

Waste Reduction Toward Zero EmissionsAsahi Glass intends to apply zero emissions to the entireAGC Group in the future.

Asahi Glass (parent) will stop using polychloride biphenyl(PCB), which is under strict control, during 2005. Use ofPCB will be totally abolished throughout the AGC Groupby 2009. We will develop plans for the destruction anddisposal of PCB by the end of 2007 and carry outdisposal as determined by the Japanese Government until2017.

*1 Subsidiary SBUs: Asahi Fiber Glass, Asahi Techno Glass, Asahi GlassCeramics, Ise Chemical, and Optrex

*2 Data was annualized to correct for the irregular 9-month period in fiscal2003, caused by a change in the accounting year-end.

PCB Management

Poster for Waste Reduction at Head Office (Japanese)

Cullet transporting truck

0

50

100

150

200

250

300

350

400

450

500

1995 2000 2001 2002 2003*2 2004 2005 (fiscal year)2006

(1000 tons) (%)

277

115

48

1596 5 6

16 17 8 6

2007

60

10

20

30

40

50

60

70

80

90

100

Waste sent to landfill (Asahi Glass (parent))

Recycling ratio (Asahi Glass (parent))

Waste sent to landfill (five SBUs)

11 11

Target47.2

78.0

94.8

99 999995.2 94.8

Waste Sent to Landfill and Recycling Ratio (Asahi Glass (parent + Subsidiary SBUs*1))

CSR Report 2005 39

Environment

Located in Yonezawa City, Yamagata Prefecture, innorthern Japan’s the Azuma Mountain Range, AsahiGlass Fine Techno Co., Ltd. (AGFT) produces glasssubstrates for flat panel displays (FPD). With their motto“Let’s create our own beautiful plant to match thebeauty of nature in Azuma,” they are actively engagedin environmental activities, including certification for ISO14001.Reducing the amount of waste is one of their focalactivities. Among the types of waste generated duringthe manufacturing process, sludge, which was onetype of waste that had defied recycling, was finallyadded to the list of “zero emissions waste” after theysuccessfully developed a route for recycling it. The plant divides the waste into some 30 kinds. Ofthese, waste oil, sludge and plastics could not berecycled. But in October 2004, they successfullydeveloped a recycling process which turns them intomaterials for road beds, and eventually the recyclingratio, including thermal recycling (equivalent to 1%), for2004 increased up to 100%. We have established arecycling flow within the AGC Group for some polishing

Asahi Glass Fine Techno implemented various EMS activities and achieved Zero Emissionsin fiscal 2004. Their watchword is “Let’s create our own beautiful plant to match the beautyof nature in Azuma.”

Asahi Glass Fine Techno in Action Toward Zero Emissions

sludge or cullets generated in large amounts during themanufacturing process.In addition to the zero emissions effort, AGFT usesglass substrates in which arsenic, a toxic substance, isnot intentionally added in the production process and isinvolving employees in a “Full of Flowers Movement” atthe plant site, where they can cultivate green areas,including plants and vegetation.

Cutting Recycling 1%

Thermal recycling 1%

Recycling 49%

Recycling as saleable material 49%

Chamfering

Polishing

Cleaning

Inspection

Packaging

Shipping

Cullets with/without film formation

Waste oil

Sludge

Plastics

General waste

Others

Polishing sludge

Plastics

Waste chrome solution

Polishing material

Cullets

Metal

Paper

Production Process Types of Waste Details of Recycling

Recycling

Thermal energy

Refine and recycle

Recycling as raw material ofglass substrates (in AGC Group)

MetalPaper

Road bed materials, cement road bed materials

RPF, cement, etc.

Zero emission activities at Asahi Glass Fine Techno

Asahi Glass Fine Techno Co., Ltd.

Asahi Glass is taking various measures to reduce waste to achieve the zero emission target by the end of 2005.

Asahi Glass voluntarily investigates soil andgroundwater for potential pollution on its premisesand sites of its facilities and plants. If any pollutionis found, we will immedeately take appropriateactions to decontaminate the site under theguidance of the competent authorities.

Environment

CSR Report 200540

Investigating Soil and Groundwater and Preventing Pollution

Asahi Glass closed its Funabashi Plant at the end ofMarch 2004 and pulled down. At the same time, we madevoluntary tests on the ground in l ine with the SoilContamination Countermeasures Law (for fluorine andhexavalent chromium, which are mandatory substancesunder the Law, and voluntary investigation of 24 othersubstances).As a result, levels of some pollutants contained in soilwere detected beyond the specified limits, includingfluorine, hexavalent chromium, lead, and boron in additionto arsenic up to 3,800 times more than the standard limit.In groundwater and perched water layers*1, arsenic to amaximum amount of 7,300 times the standard limit wasfound in perched water layers, and fluorine and lead werefound in the groundwater to an amount exceeding thegroundwater environmental standard.Asahi Glass submitted a report on their investigation toFunabashi City on May 20, 2004. The site on whichpollutants were found to be above the standard limits(30,000 m2 in area) was announced as a designatedcontaminated area by Funabashi City on May 27.We are determined to decontaminate the site polluted bythe contaminants disclosed above in two to three years sothat the designation of the site as contaminated will belifted, and the entire site will be cleaned up to a level belowthe standard limit.We held a joint briefing meeting on May 27 with FunabashiCity to explain the result of the investigation and futuremeasures to local residents.

Seimi Chemical Co., Ltd. detected arsenic and volatileorganic compounds in concentrarations beyond the

Measures to Prevent Soil and GroundwaterContamination at Seimi Chemical

*1 Perched water is local pooling of water in the ground.

Results of Investigating Soil and Groundwaterat the Former Funabashi Plant and FutureMeasures

environmental standards as a result of a voluntaryinvestigation of the soil and groundwater at the ChigasakiPlant and announced the results in July 2003. Currentlythey are cleaning up the site under the instruction ofChigasaki City according to the following process.In fiscal 2004, seven locations covering a total area of 1,060m2 were cleaned up. In fiscal 2005, decontamination workis going on at three locations covering an area of 1,170 m2.

Asahi Glass and its affiliate Asahi-Penn Chemical Co., Ltd.are aggressively working on decontaminating soil andgroundwater polluted by volatile organic compounds atthe Chiba Plant.To be specific, we disclosed the results of our investigationand the measures we would take in May 2001 and continueto carry out the following measures under the guidance ofthe administration and academic experts.

• Installing shut-off walls to prevent the spread of contamination(completed in December 2002)

• Clarifying the mechanism of pollution to achieve efficientdecontamination

• Prioritized decontamination of highly contaminated spots• Monitoring groundwater flows and status of contamination• Testing and reviewing new decontamination technologies

Decontamination of Soil and Groundwater at Chiba Plant

<Decontamination measures>■ Fixed point observation of groundwater• Observation at 10 points in the plant site (every month)• Observation at six wells in the neighborhood

(every three months)

■ Measures to prevent the spread of groundwatercontamination

• Pumping up groundwater from eight barrier wells in the plantsite. Decontamination work for the groundwater started inDecember 2004.

■ Improving contaminated soil• Detailed investigation, including boring, conducted at highly

contaminated spots first. Soil decontamination startedimmediately based on the results.

Groundwater pumping and decontamination facility (Seimi Chemical)

Former Funabashi Plant Briefing meeting on the investigationof the former Funabashi Plantground held for local residents

CSR Report 2005 41

Environment

The AGC Group produces and uses a largenumber and variety of chemical substances. Wemanage all chemical substances properly inorder to maintain a good local living environmentand to protect the global environment.

Proper Management of Chemical Substances

In carrying out the proper management of chemicalsubstances, the Chemicals Company pays close attentionto three factors: the environment, occupational health &safety, and chemical substance safety.Specific actions at their plant include reducing theenvironmental impact associated with productionactivities, occupational health & safety in the productionprocess of chemical substances, reporting in line with thePRTR (Pollutant Release and Transfer Register) Law toensure the safety of chemical substances, and provision ofsafety information to customers.Their special focus is on expanding the chemical recyclingof substances that cause destruction of the ozone layerand global warming and reducing the amount of industrialwaste put into landfill. The chemical recycling process forthe recovery, destruction and reclamation of fluorocarbonsis now in full operation, producing raw materials offluororesin (pages 12 and 13).To reduce substances that have environmental impact,efforts are being made with numerical targets incorporatedinto the mid-term management plan, JIKKO-2007, whichstarted in 2005. We set our own numerical targets forfluorinated solvents developed by ourselves in addition tothe substances regulated by the PRTR Law from theviewpoint of preventing global warming. In our capacity asa chemical substance manufacturer, the ChemicalsCompany is determined to carry out its business activitiespaying close and constant attention to the environment.

The AGC Group implements various programs for theproper management of chemical substances.

Programs for Proper Management

Actions by the Chemicals CompanyWe regularly measure the concentration of substancesregulated by the PRTR Law in the environment at andaround our plants and facilities to make sure no impact isgiven to the environment.We also make exposure impact evaluations usingsimulations.We started using the MSDS (Material Safety Data Sheet)that specifies the right method of handling chemicalsubstances in use and waste disposal and providesinformation on environmental impacts in 1992. As ofDecember 2004, we issued 1,510 different MSDSs inJapanese and 768 in other Languages.We also use the Yellow Card system at the logistics stage.Yellow Cards are documents that describe what to do andwhat to notify for chemical products in case of an accidentduring transportation. We are required to educate ourtransporting contractors based on the Yellow Cards. TheChemicals Company has prepared Yellow Cards in linewith the Distribution Safety Management Guidelines andprovided appropriate education and training for itsemployees as well as its subcontractors.

MSDS (Material Safety Data Sheet) Changes in the Concentration of Methylene Chloride in the Air at the SiteBoundary (annual average)

Concentration (µg/m3)

1999 2000 2001 2002 2003 2004 (fiscal year)

JapaneseEnvironmentalstandards(150µg/m3)

Chiba Plant, Asahi Glass

0102030405060

130140150160

Measurement of environmental concentrations

Environment

CSR Report 200542

Reducing the Environmental Impact in Logistics

Major products of the AGC Group, such as glass andchemicals, are often very heavy, imposing a high impacton the environment. It is therefore essential for us toreduce the environmental impact of our logistics.

Asahi Glass has an optimized production system, withplants located in various parts of Asia, and transports rawmaterials and products appropriately around this productionnetwork. Some flat glass substrates are colored, and thesecannot be produced in melting furnaces that produceuncolored glass. Therefore, colored cullets, which are themajor raw materials of glass, must be transported to theright production sites. Traditionally, products and culletswere separately transported, which resulted in emptycontainers moving around between production sites andwarehouses. In 2005, we started using the containers whichhad become empty after unloading imported products totransport cullets, thereby reducing the environmental impactof Logistics. In fiscal 2005, we aim to Logistics about 300containers’ worth of cullets using this system.

Asahi Glass launched a program to reduce the pollutiongenerated by in-plant compact forklifts in 2003. To be

Reducing Pollution from In-plant CompactForklifts

Reducing the Environmental Impact duringCullet Transportation

specific, forklifts powered by diesel engines were replacedby battery- or LPG-powered ones. Diesel engines ingeneral produce more particulate matter or NOx thangasoline engines or LPG engines, which is why weneeded to change to a low-emission driving system tomatch the diesel vehicle regulations applying in the TokyoMetropolitan area and the Kinki area. Although only 28%out of a total of 361 compact forklifts used at all the plantsof Asahi Glass (parent) are low-emission ones, we plan toraise the low-emission ratio to 62% by 2008.

With the revision of the Law Concerning the Rational Useof Energy, when using transporters larger than a certainoperational size, we are required to prepare energy savingprograms and notify the designated authority of energyconsumption in 2007. We are implementing variousprograms to meet these requirements, includingestablishing a system to understand environmentalperformance data associated with transport, anddeveloping plans to reduce CO2 in logistics.

Future Efforts

T h a i l a n d

(1) Trucking with empty containers



Separatelytransported

J a p a n

(2) Trucking with cullet containers

Aichi PlantCullet

Products

(3) Cullet containers (4) Cullet containers

Plants ofThai

Asahi Glass


(4) Trucking with product containers (2) Trucking with product containers(3) Transport by sea with product containers

(3) Cullet containers

(3) Transport by sea with product containers

Cullet

Products


(4) Trucking with product containers


Containers are empty

(2) Trucking with product containers

Conventional System

New system

Aichi Plant

Aichi Plant

Warehouseat port

Warehouseat port

Warehouseat port

Warehouseat port

Warehouseat port

Warehouseat port

Plants ofThai

Asahi Glass

Plants ofThai

Asahi Glass

120

100

80

60

40

20

0

(%)

2003 2004 2005 2006 2007 2008(fiscal year)

28%

72%

38%

62%

49%

51%

54%

Low-emission forklift Diesel, etc.

46%

59%

PlannedPlanned Planned

41%

72% 62%

51% 46% 41%

62%

Planned

38%38%

Low-emission In-plant Compact Forklift Plan (Asahi Glass (parent))

Cullet transporting containers

CSR Report 2005 43

Environment

Green Procurement and Green Purchasing

Depending on the characteristics of the businessarea, the AGC Group, including all In-houseCompanies and SBUs, is actively pursuing greenprocurement policies for its materials andcomponents. We also energetically supportenvironmental preservation through green purchasingfor our stationery products and office supplies.

The Electronic Materials & Products General Division ispromoting green procurement jointly with the affiliatesunder its control (Asahi Glass Koriyama ElectronicMaterials Co., Ltd., Asahi Fine Materials Co., Ltd., andAsahi Precision Circuit Co., Ltd.).To be specific, they introduced the Green ProcurementStandard in April 2004 and examined the degree ofenvironmental impact of the materials procured from oursuppliers. This investigation will continue in 2005 so thatthe data will create better results in the PDCA cycle.

To comply with the EU RoHS directive*1, Optrex Corp.decided to stop using six designated chemicalsubstances*2 contained in LCD products that i tmanufactures and sells by March 2005. For standarditems produced by Optrex, they wi l l shift toproducing/shipping RoHS-compliant products in April2005. RoHS-compliant products for custom-made itemswill be introduced in line with the agreements we havewith our clients for custom-made items.Optrex considers reducing environmental impact to beone of its major environmental activities. In 2000, theyacquired ISO 14001 certification and formulated their ownGreen Procurement Standard in September 2003. Theyare continuing this policy and actively seek to developand produce eco-friendly products.

Asahi Glass introduced Green Purchasing Guidelines foroffice items in 2003. These add environmental impact to

Green Purchasing of Office Items

Optrex Totally Eliminates the Six ChemicalsDesignated in the RoHS Directive

Electronic Materials & Products GeneralDivision Introduces Green Procurement

selection criteria such as price, quality, function anddesign. The Guidelines accord highest priority to itemswith the lowest environmental impact, given equality onother criteria.In 2004, we failed to achieve the target for stationery andoffice supplies, but almost achieved the targets for othercategories. The green purchasing ratio achieved in 2004for the total of the four items was 96%.In 2005, we introduce Green Purchasing Guidelines forwork clothes (made of blended materials). That means55% of polyesters mixed in the fabric will be replaced byrecycled PET resins. The “green” work clothes have thesame color, feel and anti-static performance as theprevious ones.

*1 RoHS (Restriction on the Use of Certain Hazardous Substances inElectrical and Electronic Equipment) directive (2002/95/EC) issued by theEU in 2002 limits the use of six designated chemical substances in allsuch products launched in EU countries from July 2006.

*2 The six designated chemical substances are lead, mercury, cadmium,hexavalent chromium, PBB (polybrominated biphenyl) and PBDE(polybrominated diphenyl ether)

Actions at the Automotive Glass Company

The Japan/Asia Pacific General Division of the AutomotiveGlass Company supports “green purchasing” for its rawmaterials and components. This effort is made in the form ofa “green partnership,” in which the Automotive GlassCompany has in place unique guidelines combined with therequests of customers and Asahi Glass’s own standards forpresentation to suppliers, and compliant suppliers provideraw materials with lower environmental impacts.

This activity is detailed on pages 14 to 15.

TargetsResults

Printing and copy paper

Office equipment (e.g. PCs and Copying machines)

Office supplies

Office furniture

80%

100%

80%

100%

Purchase value base

2004

98%

100%

57%

97%

Green Purchasing Targets and Results (Asahi Glass (parent)) Green procurement standards (Electronic Materials & Production General Div.)(Japanese)

Environmental Accounting

Environment

CSR Report 200544

Asahi Glass views accurate assessment of the costs andbenefits of environmental activities as an essential part ofperformance improvement in this area. The Asahi Glassenvironmental accounting system is based on theEnvironmental Accounting Guidelines 2002 and Guidelinefor Classification of Environmental Conservation Cost2003 issued by Japan’s Ministry of the Environment. AsahiGlass has also compiled its own manual on environmentalaccounting procedures and methods. Accounting data is collected in each In-House Companyand SBU*1 to enable its use as a management tool. Thecompilation of data by divisions began in 2003. AsahiGlass is also considering introducing Material Flow CostAccounting*2 methods. In fiscal 2005, we intend tointroduce material flow cost accounting to some of theproduction processes to verify the effectiveness of thenew accounting method.While the Asahi Glass environmental accounting system isstill evolving, a working group is examining the issue ofcompiling consolidated environmental accounts and therole of the environmental accounting system as anenvironmental management tool. External specialists arealso invited to in-house environmental accountingseminars as part of educating our employees anddeepening their understanding.

Environmental conservation cost put a monetary value onefforts by Asahi Glass to reduce environmental impact.

Environmental Conservation Cost

*1 SBU stands for Strategic Business Unit.

*2 Material Flow Cost Accounting is a way of measuring how the flow ofmaterials and energy absorbed by manufacturing processes generatesoutputs in terms of product volume and value.

Such measures can prevent, constrain or avoid generatingthe original impact, eliminate related effects, and seek torestore any damage. Costs include capital investment inenvironmental facilities as well as running costs incurred inthe operation of equipment designed to prevent pollution.

There are no major changes in environmental expenseswith time.Unl ike environmental expenses, environmentalinvestments change year by year and those for fiscal 2003are different from those for other years in terms of ratio.But there is no major dif ference in environmentalinvestments for fiscal 2004 compared to those for fiscal2002 or before.

Changes with Time in EnvironmentalInvestments and Expenses

Cost Category

(1) Business area 2,750

1,231

1,228

291

0

0

898

21

443

4,112

(2) Upstream/Downstream

(3) Administration

(4) R&D

(5) Social Activity

(6) Environmental Remediation

Total

(1)-1 Pollution Prevention

(1)-3 Resource Circulation

Breakdown

Investment

6,814

3,805

1,340

1,670

1,038

444

4,815

115

3,540

16,767

Cost

(Millions of yen)

* Scope of calculation: Asahi Glass (parent) Period of calculation: January 1, 2004 to December 31, 2004

(1)-2 Global Environmental Conservation

Environmental Conservation Cost

Breakdown of Environmental Investments Breakdown of Environmental Cost

Global Environmental Conservation

100

80

60

40

20

0

(%)

(fiscal year)

100

80

60

40

20

0

(%)

(fiscal year)

Pollution Prevention

Social Activity

2001 2002 2003 2004 2001 2002 2003 2004

Administration

Resource Circulation

Upstream/Downstream

R&D

14%

50%55%

45%

10%

3%

42%

24%

1%

8%

33%

34%

22%

3%

20%

29%

7%

14%

50%55%

45%

10%

3%

42%

24%

1%

8%

33%

34% 38%

5%

16%

5%

6%

29%

1%

38% 35%

8%

12%

10%

4%

30%

1%

35%31%

9%

13%

6%

4%

36%

1%

31% 29%

10%

13%

8%

3%

36%

1%

29%

10%

13%

8%

3%

36%

1%

9%

13%

6%

4%

36%

1%

8%

12%

10%

4%

30%

1%

5%

16%

5%

6%

29%

1%

22%

3%

20%

29%

7%

CSR Report 2005 45

Environment

Environmental accounting is a tool to disclose a company’s environmental conservation measures asaccounting information for quantitative evaluation by investors, dealers, suppliers and local citizens. AsahiGlass uses the data for environmentally aware management.

Reducing Impact Simple Y to Y Change Sales-corrected Change

Energy Usage

Water Usage

CO2 Emissions

Final Waste Disposal

Wastewater

COD Emissions

SOX Emissions

NOX Emissions

Soot and Dust Emissions

Reduction in environmental impact = (fiscal 2003 output volume) – (fiscal 2004 output volume)Sales correction factor = (1 – (1 – simple Y to Y change) / Y to Y sales ratio)Asahi Glass (parent) Y to Y sales ratio = (fiscal 2004 sales) / (fiscal 2003 sales) = 1.40

*2 PJ (peta joules) = 1015 joules

Benefits Corresponding to Upstream/Downstream Cost

Other Environmental Conservation Benefit

–10

–15

–632,000

4,000

–8

–97

–409

–54

27

PJ*2

million m3

t-CO2

t

million m3

t

t

t

t

–26%

–40%

–28%

31%

–31%

–12%

–50%

–1%

25%

Recycling of product shipment packaging materials

Cullet collection

(actual benefits listed in table below)

219,000 t

–19%

–29%

–20%

22%

–22%

–9%

–36%

–1%

17%

Benefits associated with transportation and other operations (not measured by Asahi Glass)

Environmental Conservation Benefit

Environmental conservation benefit measure volume-based changes in outputs. These effects ref lectprevention, constraining or avoiding generating theimpact, eliminating related effects, and restoring damage.Calculations of the environmental conservation benefits forfiscal 2004 indicate an increase in environmental impactsover the previous year.

Asahi Glass measures the economic benefits of itsenvironmental conservation activities as the contribution toprofit of net positive changes. This could be measuredeither in real, quantitative terms, or as a theoreticalestimate. Asahi Glass prefers the former approach, basedon collected data.

Economic Benefit Associated withEnvironmental Conservation Activities

Environmental Conservation Benefit

Revenue

Expense saving

380

628

1,423

Revenues from the recycling of waste generated by main business activities and the recycling of used products

Effects of energy savings

Lower waste treatment costs due to resource savings and recycling

Benefit Value (Millions of yen)

Economic Benefit Associated with Environmental Conservation (actual benefit)

Environment

CSR Report 200546

The AGC Group actively communicates on environmentalissues with its stakeholders through the CSR Reports, thewebsite and the direct dialogue.

Environmental Communications

Asahi Glass started issuing an Environmental Report in2000 and has been steadily disclosing environmentalinformation since then. In 2004, we started disclosing thestatus of our social responsibility in the form of theSustainability Report. This year we issued our firstCorporate Social Responsibility (CSR) Report. GlaverbelS.A. in Europe issues their own environmental report,which is available on their website.We also disclose information on environmentally soundproducts and technologies through environment-relatedexhibitions and other events.We make constant efforts to keep in direct communicationwith our stakeholders. These efforts include holdingregular gatherings with local residents and consumers forhaving discussions and inviting stakeholders to our plantsso that they can get to know our environmental activities.We have a dedicated contact on the Asahi Glass websitefor inquiries from stakeholders.The AGC Group strives to further promote environmentalcommunications with stakeholders to deepen therelationship.

Environmental Communications by the AGC Group

Kashima PlantThe Kashima Plant served as the coordinator for theKashima District Responsible Care (RC) Liaison Meeting infiscal 2004.On February 18, 2005, the 4th RC Kashima DistrictDialogue Meeting was held by the Kashima District RCLiaison Meeting, at which local residents and the localmunicipalities were invited to Kashima Central Hotel forthe dialogue.The Liaison Meeting staff explained the safety andenvironmental efforts of the companies in the KashimaDistrict to local residents and the local municipalities,followed by active discussion.

Chiba PlantOn February 29, 2004, students at elementary schools inChiba Prefecture and their parents, 32 in total, visited theChiba Plant as part of a family tour sponsored by theChiba Prefectural Environment Foundation of companieswho are active in combating global warming.The General Manager of the plant and EnvironmentalSafety office’s staff guided them around the fluorocarbonsdestruction facility, one of the substances responsible forglobal warming, and other environment-related facilitiessuch as wastewater treatment plants.The part icipants were very much interested inenvironmental matters and asked many questions afterthe tour.One of the participants sent a thank-you email to theChiba Plant. We felt anew how very important it is to keepin contact with members of society to foster mutualunderstanding.

Environmental Communication at Plants

Family tour of companies who are active in combating global warming 4th Kashima District RC Dialogue Meeting

Glaverbel Environmental Report

http://www.glaverbel.be/en/about/environment/

CSR Report 2005 47

Environment

Environmental Activities at Overseas SitesThai Asahi Glass Public Co. Ltd. (Thailand)

Thai-Asahi Glass Public Co. Ltd., a member of theAGC Flat Glass Company, acquired ISO 14001certif ication in 2004, marking the full-scalecommencement of environmental managementsystem (EMS) activities. They develop environmentalactivities considering relationship with communities.

Thai Asahi Glass Public Co. Ltd. (TAGC), with its headoffice in Samutprakarn, Thailand, has some 1,200employees including those in its three plants atSamutprakarn, Chonburi and Rayong. Mainly producingfloat glass, fabricated glass: construction tempered glass,Reflective Glass, Laminated Glass, Insulating Glass, MirrorGlass Sol-Gel Antiglare Glass TAGC is a major productionsite that supplies products to Thailand and other Asiancountries.TAGC was established in 1963 and incorporated withAsahi Glass’s investment in 1964. To focus on“Environment,” one of Our Shared Values in AGC GroupVision “Look Beyond,” TAGC has been actively involved invarious programs for environmental conservation. Theirefforts have further intensified since acquiring ISO 14001certification in 2004.

TAGC is engaged in a wide variety of measures andactivities for environmental conservation. Reduction ofenvironmental impact during production, which must be ofhighest priority in the environmental efforts of any top-ranking manufacturer, is achieved by instal l ingelectrostatic precipitators and using natural gas for fuel.Their emissions of environment-impacting substances hasalready been reduced to the same level as in our plants inJapan. TAGC also minimizes the amount of waste. Theyapply strict criteria for sorting refuse and reuse all itemsthat are recyclable.Some 750 trees have been planted in their compound fora material contribution to local greening. In addition, TAGCmonitors groundwater levels on a regular basis to protect

Environmental Conservation Award Presentedby the Thai Government

Main Flat Glass Producing Sites to SupplyProducts to Asian Countries

water resources.Their external activities for the environment includeforestation, restocking rivers with young fish, support forenvironmental education in schools, and neighbors’ andstudents’ visit to the plants, all of which are primarilycentered around local benefits.TAGC responded promptly to the devastating tsunamidisaster caused by the gigantic earthquake off Sumatra.They dispatched employees for voluntary activities andprovided monetary support and materials to thedevastated areas. Their activity is characterized by a focuson direct connections with local people, such as supportfor school education and dialogue with local people,based on the belief that we are all neighbors. Their policywas highly evaluated by the Thai Government, whoultimately presented the Environmental ConservationAward to TAGC.Every member of TAGC is dedicated to environmentalconservation while always keeping close to local people towin their trust and meet their expectations.

Recyclable materials boxes for crates, etc.Planting of trees by employees

Neighbors visiting the plant

AGC Automotive Thailand Co. Ltd., a member ofthe AGC Automotive Glass Company, is engaged ina variety of activities to establish their qualitymanagement system and environmentalmanagement system.

Environment

CSR Report 200548

AGC Automotive Thailand Co., Ltd. (Thailand)

AGC Automotive (Thailand) Co., Ltd. (AATH) celebrated its30th anniversary in 2004. It has been growing steadily andstrongly as a top automotive glass manufacture with thegrowth of car manufacture in Thailand who aims to“become Detroit in Asia.”In l ine with the Group Vision “Look Beyond” andmanagement policy “JIKKO,” AATH’s mission is to“pursue comprehensive and global No.1 S (safety), E(environment), and QCDDM (quality, cost, design, delivery,and management).”The company applies the PDCA cycle swiftly in all jobaspects under the principle of 5-Gen Principle (Genri,principle; Gensoku, rule; Genba, site; Genbutsu, theproduct itself; and Genjitsu, fact) so that QMS and EMScan take root in its operation.

The AGC Group is committed to an integrated EMS (seepage 26). In line with this principle, AATH changed itsstatus as an implementer of integrated EMS in February,2005.Aiming at reducing environmental impact, AATH isengaged in a variety of environmental activities, includingreductions in the consumption of utilities, such as powerand water, recycling of materials, mainly glass cullets,reuse of packaging materials, segregated managementand reduction in industrial waste. They are also switchingto lead-free ink and trivalent chromium components inresponse to restricted use of toxic substances, includinghexavalent chromium and cadmium as spelt out in theELV Directive (2000/53/EC).The internal audit system for affiliates in Asia was launchedin March 2005 to support information sharing and mutualimprovement.

Various Activities for Implementing the EMS

AATH Aiming at Full Implementation of QMS and EMS

AATH markedly increased the number of hours allocatedto occupational health and safety education for employeesin 2004 to boost safety awareness among employees.A thorough investigation of the causes of accidents andfull implementation of preventive measures has also beenincorporated into the standard procedure. As a result,AATH achieved 500 consecutive serious accident-freedays of operation up to May 10, 2005. The accident rateis clearly going down.

Occupational Health and Safety

AGC Automotive Thailand Co., Ltd.

40

30

10

20

0

37.4

28.731.8

20.5 13.8

2000 2001 2002 2003 2004 (fiscal year)

(–)

Industrial accident frequency = (no. of workers injured in accidents more serious than minor injuries × 1 million)

total hours (employees at all operating sites and in cooperating companies)

Changes in the Frequency of Industrial Accidents with Time

20

25

30

15

5

10

0

23.1

19.9

18.2

2000 2001 2002 2003 2004 (fiscal year)

(kWh/product m2)

27.3 26.7

power consumption (kWh)

product (m2)

Power consumption per 1 m2 of products produced (kWh/product m2) =

Power consumption per 1m2 of products produced (kWh/product m2)

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Recycling Landfill Hazardous material landfill

(kg/product m2)

3.0403.070

2.941

2.3292.380

3.0403.070

2.941

2.3292.380

0.9200.880

0.782

0.619

0.6300.920

0.8800.782

0.619

0.630

0.0070.007

0.0070.005

0.006

Fiscal 2000

Fiscal 2001

Fiscal 2002

Fiscal 2003

Fiscal 2004

Wastes per 1 m2 of products produced (kg/product m2) =

wastes (kg)product (m2)

Wastes Per 1 m2 of Products Produced (kg/product m2)

CSR Report 2005 49

Pacific Glass Corp., a member of the AGC DisplayCompany, is making all-out efforts to become the world’stop plant for environment occupational health & safety,quality, cost and productivity.

Environment

Pacific Glass Corp. (Taiwan)

Pacific Glass Corp. (PGC), a member of the AGC DisplayCompany, was established in 1985 as the first overseasCRT plant in the CRT production. PGC used to produceand supply for customers in Taiwan panels and funnels,the parts used in CRTs.Today, PGC produces high-precision CRT panels for PCsand supplies them to China, and serves as the AGCGroup Display Company’s major overseas production sitein the CRT production.

PGC acquired ISO 9001 certification in 1993. Since then,they have been making all-out efforts to achieve TotalProductive Maintenance (TPM) for enhanced productivityand quality.They reinforced their environmental efforts in 2000,including reductions in waste generation, savings onpower and other util ities, and improvements in therecycling ratio. In February 2005, PGC established its ownenvironmental pol icy, set up their environmentalmanagement system and also acquired ISO 14001certification.Today, they are adding a further boost to their efforts andall the staff at the plant are geared up to the challenge ofbecoming the world’s top for environment occupationalhealth & safety, quality, cost and productivity.Their efforts in waste reduction in 2004 includesegregated collection of waste and employee educationon waste reduction, which has resulted in the generationof a total 5,319 tons of waste and achievement of a

ISO 14001 Certification Obtained in February 2005

Overseas Production Center in the CRTProduction

recycling ratio of over 95%.Cullet is an important raw material and it is being reused.The cullet generated at their own plant is collected andcullet from waste household electric appliances is alsopurchased from refuse collectors for reuse.PGC also decided to use the grinding slurry disposed ofas waste from the grinding process line in Asahi GlassFine Techno Taiwan Co., Ltd (AFT), another member ofthe AGC Display Company. The Technology Division ofthe CRT Glass General Division analyzed the waste slurryand found it suff iciently pure for use at the CRTproduction. With the help of AFT, PGC started collectingand reusing the polishing slurry in 2003. The Taiwanesegovernment approved this recycling concept under thereuse of byproducts, not waste. We intend to apply thisscheme at other overseas plants.

PGC holds an annual emergency drill for all employees totake part in; this involves a simulated drill to deal with fires,accidents and other emergencies. The drill held in fiscal 2004 simulated a leakage of moltenglass, and provided training in early detection, notification,firefighting and evacuation.As a result of our promotion of outsourcing, the number ofemployees from contractors and subcontractors workingin PGC’s compound has increased. To cope with thissituation, PGC intends to enhance their preparedness insafety and disaster prevention by assigning a dedicatedsafety officer in the health and safety organization in fiscal2005.

Emergency Drill for All Employees

Signboard promoting recycling activities (Chinese)Pacific Glass Corp.

P.T. Asahimas Chemical, a member of AGC ChemicalsCompany, obtained ISO 14001 certification in 2001. They areactively involved in environmental conservation as well asoccupational health & safety and industrial safety & security.

Environment

CSR Report 200550

P.T. Asahimas Chemical (Indonesia)

P.T. Asahimas Chemical (ASC) is a chemical companywith one plant at Chiregon, a city on the western tip ofJava, Indonesia, facing the Sunda Strait. Their majorproducts are caustic soda produced from electrolysis ofsalt water, vinylchloride monomer (VCM) which is formedby adding chlorine to ethylene, and polyvinylchloride (PVC)resin. Since its startup in 1989, ASC has reinforced theirproduction equipment four times to become one of themajor chemical plants in Southeast Asia that produceschlor-alkali products, from upstream to downstream.

ASC’s attitude to safety and the environment is toprioritize the safety and stability of plant operations in away that addresses concerns for the environment.Their environmental efforts to minimize environmentalimpact include improved efficiency in the use of rawmaterials for reducing waste, improvement of thebyproduct recycling ratio, reduction in the consumption ofpower and other utilities. In 2001, ASC acquired ISO14001 certification. In 2003, they came up with a systemto reuse treated PVC process wastewater in exhaust gasdecontamination towers at other plants and installed thesystem. This helped them achieve an 80% recycling ratio.ASC introduced a safety management system incompliance with OHSAS18001 to ensure organizationalintegrity on safety, support line management, and toconduct risk assessment of all the work and locations ateach worksite. They also provide health and safetyeducation and training to all employees as well ascooperating companies to enhance their safety

Positive Actions for the Environment,Occupational Health & Safety and IndustrialSafety & Security

One of Our Major Chlor-alkali in South EastAsia

awareness.Activities concerned with industrial safety & securityinclude a monthly firefighting drill for an assumed fire orexplosion, and a practical disaster mit igation andprevention drill for the assumed leak of the types ofhazardous substances that are unique to a chemicalsfactory. In addition, ASC shares relevant information at themonthly industrial safety meetings held by the disasterprevention organization formed by eight neighboringindustrial complexes, of which ASC is a major member,and holds an annual joint extensive emergency drill withthat organization to ensure smooth and effective jointactivit ies to mit igate and prevent disasters andemergencies.ASC also holds a communication meeting twice a year,inviting local residents, NGOs, and newspaper reporters,to explain to them the actions that ASC is taking on theenvironment, occupational health & safety and industrialsafety & security.

Communication meeting with local residentsEmergency drill

CSR Report 2005 51

The AGC Group makes all-out efforts with its activities forindustrial safety & security, based on our own BasicIndustrial Safety & Security Policy.

Environment

Industrial Safety & Security Activities

Asahi Glass conducted a special industrial safety & securityaudit at nine plants, including the former Funabashi Plant,and one Research Center from July to August 2004.Particularly focusing on fire, this audit examined thesefacil it ies against a checklist of some 70 items. TheEnvironmental & Social Responsibility Division not onlychecked documents, but also examined how well employeesat production sites know the emergency contacts and howwell they know about the causes of fires that occurred atother plants. The results of this investigation were fed back atPlant General Manager Meeting.The investigation revealed both the excellent actions beingtaken and improvements that need to be made at these plants.For instance, at the Keihin Plant they paint easily-recognizablemarks on the hard hats of the in-house firefighters for quickidentification and enhancement of the mission awareness ofthe in-house firefighters themselves. The plant and runs anindustrial safety system mainly composed of employees whocan get to the plant within 30 minutes in case of emergencies.One of the problems commonly found in these plants isinconsistencies in the procedure used to notify the firedepartment. The Environmental and Social ResponsibilityDivision is undertaking to improve industrial safety at each ofthe plants in response to the findings of the special audit byanalyzing the advantages and weaknesses revealed by thespecial industrial safety audit and identifying the tasks to be

Special Industrial Safety & Security AuditFocuses on Fire

tackled. The checklist prepared for the audit has already beendistributed to all affiliates for standardization in the AGC Group.We are continually reinforcing our industrial safety system.

Asahi Glass gives an industrial safety & security seminar oncea year for our own industrial safety & security officers andcounterparts in our cooperating companies. Some 40 peopleattended the annual seminar held on October 22, 2004.The seminar usually discusses accidents that actuallyhappened in Asahi Glass plants to teach people how tofind causes, what to do immediately after the accident andwhat preventive actions to take. The 2004 seminarfocused on a fire caused in the previous year at theKashima Plant and people involved commented on theincident. A questionnaire is given to participants after theseminar to gather information for future seminars.

In fiscal 2004, four fires occurred in Asahi Glass: at theKitakyushu Plant in March, at the former Funabashi Plant inJune, and at the Chiba Plant in October and December.The public fire department was called to the site for all thesefires, but with the help of the in-house firefighters all the fireswere put out quickly with the minimum damage. Each plantinvestigated the causes and has taken preventivemeasures. Fortunately no people were injured, but still itwas a disturbance for neighboring residents and otherparties involved.

Fires in Fiscal 2004

Industrial Safety & Security Seminar

Joint fire drill with the fire department (Kashima Plant)In-house firefighters’ hard hat (person on the right) (Keihin Plant)

The AGC Group carries out the following activities for industrialsafety & security under the principle that industrial safety and sitesafety are part of our responsibility toward the local community asa corporate citizen.

1. Management of activities for industrial safety & security shall bebased on proactive public relations programs aimed at gainingthe understanding of the local community, and shall aim topromote harmonious coexistence.

2. The AGC Group shall comply with all laws, ordinances andtreaties, and all self-imposed regulations concerning industrialsafety & security based thereon, and shall strive to improve thelevel of management of such activities.

3. The AGC Group shall establish management systems, develop thenecessary rules and planning frameworks, and invest in the requiredequipment to ensure industrial safety & security. The Group shallalso strive continuously to execute and improve related activities.

4. The AGC Group shall undertake education and trainingactivities to raise levels of awareness, knowledge and skillsrelated to industrial safety & security, while also striving toreinforce accident prevention and our response capabilities.

AGC Group Basic Industrial Safety & SecurityPolicy (Provisional Translation) (adopted February 7, 2003)

Environment

CSR Report 200552

Occupational Health and Safety (OH&S)Activities

The AGC Group adopted the above AGC Group BasicOH&S Policy in February 2001 and is acting positively toimprove OH&S, including maintaining safety and health foremployees and improving the working environment andconditions.OH&S activities are organized in three levels: GroupCorporate functions, In-house Companies and SBUs, andindividual operating sites. The Group Corporate level isresponsible for sharing information on occupationalaccidents and establishing consolidated environmentalsafety and industrial safety that allows the AGC Group tocarry out and evaluate consistent occupational health andsafety measures (see page 27).

JIKKO-2007 lists the following as essential callenges

The f irst chal lenge involves operating an eff icientmanagement system and carrying out effective riskassessments.The second challenge focusing on safety for machinery,chemical substances and work involves reinforcing theconcept of inherent safety by design for machinery in theequipment safety standard through the combined effortsof the Environmental & Social Responsibility Division, theEngineering Center and the Chemicals Company.The third challenge involves developing detailed andspecific action plans, such as creating a corporate culturewith a top priority on safety, improving the working

(1) Establishing an occupational health and safetymanagement system (OHSMS)

(2) Establishing inherent safety by design

(3) Ensuring a safe and healthy working environment

Important OH&S Tasks in the JIKKO-2007Mid-term Management Plan

OH & S Policyenvironment, and integrating activit ies to preventoccupational accidents with cooperating companies.

Al l Asahi Glass’s operating sites completed theiroccupational health and safety management systems(OHSMS) in compliance with the international standardOHSAS18001 or the Health, Labor and Welfare MinistryGuidelines in 2004. The Keihin Plant, Asahi Techno VisionPte., Ltd. (Singapore), and Siam Asahi Technoglass Co.,Ltd. (Thailand) obtained OHSAS18001 certificationaccredited by a third party organization. The AGC Group,including 28 companies in Japan and 23 overseas,continuously strives to develop OHSMS based on riskassessments, and two to three companies plan toestablish their OHSMS within fiscal 2005.To support these active efforts, the Environmental & SocialResponsibility Division provides safety training. Thedivision added a new training course: Hands-on SafetyExperience Training in fiscal 2004 and continues toimprove safety awareness and knowledge.Operating sites and affiliates that have launched theirOHSMS work harder to take action to improve safetymanagement, including improving the skills of internalauditors, strictly according to the PDCA (plan-do-check-act) cycle.

A clear understanding of the causes, identification of therisk factors and the implementation of measures to reducerisk are all indispensable in reducing industrial accidents.All the members of the AGC Group start in 2005 to applythe standardized format, which has been used for all AsahiGlass (parent) operating sites, for reporting and analyzingindustr ial accidents to achieve a more sol idimplementation of these three stages.The important points to remember when using the

Accident Reporting in a Common GlobalFormat Throughout the AGC Group IdentifiesAccident Trends and Improvements

Group-wide Application of OHSMS

The philosophy of the AGC Group is to give high priority to allworkplace-related occupational health and safety issues. The AGCGroup tries to ensure that all employees understand and share thisphilosophy while working to create an atmosphere that promotesthese values. OH&S activities focus proactively on upholding thefollowing three pillars that underpin OH&S performance and itscontinuous improvement.

1. Top-down communication of OH&S policies to employees (Creating the motivation to prioritize OH&S issues)

2. Detailed management of OH&S related issues on allproduction lines

(Ensuring production activities balance quality and productivitywith health and safety)

3. Voluntary participation in OH&S activities by all employees(Ensuring all employees participate in OH & S activities willingly)

AGC Group Basic Occupational Health and SafetyPolicy (Provisional Translation) (adopted February 7, 2003)

CSR Report 2005 53

Environment

standardized format for reporting and analysis are: (1)workers’ movement (unsafe actions), (2) unsafe conditionof equipment (things), and (3) management issues. Inaddition, we formulated detailed standard AccidentClassification Judgment Criteria for the AGC Group toprovide a consistent set of standards for items such astypes of accidents or partial damage. These criteria allowus to accurately determine accident frequency rates andwhat they actually means, thereby helping to reveal thetrend in the AGC Group in terms of industrial safety.Reports and analyses prepared in the standardized formatare disclosed on the intranet. Data on serious accidentsthat have caused workers to take time off work are alsotranslated into English and disclosed on the intranet.This system now allows all members of the AGC Group tosee the types of occupational accidents that havehappened at operating sites or subsidiaries and affiliatesand the safety management activities employed to preventor reduce those accidents. The AGC Group is committedto improving and maintaining the level of its safetymanagement.

In 2004, there were seven accidents causing absencefrom work and nine accidents involving light injuries inAsahi Glass (parent), with accident frequency rates of 0.27and 0.34 respectively, an improvement over the previousyear. There were two fatal accidents in 2004, one at adomestic affiliate and the other at a foreign affiliate.All occupational accidents are reported to the CEOregardless of the degree of seriousness. The CEO saidemphatically in his 2005 New Year Message that “wemust make ourselves fully aware of the fact that there isno sustainable growth for a manufacturer with no safeworkplace”. Whenever the CEO visits an operating site oran affiliate, he always asks them to do their best to ensurehealth and safety on the site. His request is based on theidea that a serious attitude to occupational health andsafety will lead to improvements in CSR.Occupational health and safety activities are primarilymeant for employees. The occurrence of an industrialaccident is the materialization of a risk in the workingenvironment. Finding invisible risks and eliminating themare the actions that achieve a safe working environment.With the ultimate goal of zero-accident, the AGC Group isengaged in a detailed risk assessment to establishOHSMS.

OHSMS Set Up to Reduce Risks

1999 2000 2001 2002 2003 2004 (fiscal year)

(No. of workers injured) × 1 million

Total hours workedFrequency Rate =

Asahi Glass data include employees at all operating sites (including cooperating companies)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

(Frequency Rate)

0.40 0.42

1.79

0.25 0.16

0.36

0.27

1.80 1.82 1.77 1.781.85

0.43 0.490.44

0.370.30 0.36

All industries

Asahi Glass (parent)Average for Japan Chemical Industry Association

Changes in the Frequency Ratio for Accidents Causing Absence from Work Work-related Accident Report standardized throughout the AGC Group

The AGC Group is committed to occupational health and safety in line with a philosophy which accords ahigh priority to all workplace-related occupational health and safety issues.

The AGC Group contributes to the betterment of societythrough business activities as well as being engaged in avariety of social action programs, including support forartistic activities, awarding scholarships through theFoundation, award programs and promoting research.

Environment

CSR Report 200554

Social Contribution Activities

The AGC Group is engaged in a variety of social actionprograms to contribute to the growth of the whole ofsociety through various activities that respect harmonywith society.Asahi Glass supports artistic activities, including glass art,organizes athletic events at the plants, and providesaccess to site facilities for youth baseball teams as part ofsupporting local community activities. Having been the first to mass-produce flat glass andconsidering our deep historical relationship with glass,Asahi Glass supports exhibits at the Modern GlassMuseum at the Koganezaki Crystal Park as its solecosponsor. The town of Nishi Izu, Shizuoka Prefecture,where the park is located, is deeply associated with AsahiGlass as one of the sites for the silica sand, the basicmaterial of glass. We have been extending cooperation tothe Koganezaki Crystal Park since its opening in 1997 outof a desire to let people know more about theattractiveness and potential of glass and we cosponsoredthree exhibits at the Museum in 2004. Of these exhibits,the Glitter of Crystal Glass Exhibit was particularly highlyevaluated by visitors.

Asahi Glass’s Social Action ProgramIn the f ield of support for the arts, Asahi Glasscosponsored the Monet and Renoir: Two GreatImpressionist Trends held at the Bunkamura Museum ofArt, Tokyo, in 2004. We continue our support for artsactivities, centering on glass art, as part of our rapportwith society in the fields of culture and art.

The Asahi Glass Scholarship Foundation was establishedin 1957 to commemorate Asahi Glass’s 50th anniversarywith the mission to foster talent. The foundation provideseconomic assistance to deserving students learning inJapan, regardless of their nationality.

The Asahi Glass Thailand Foundation and Asahi GlassIndonesia Foundation were established in 1982 as one ofthe means to return profits to overseas. These foundationsprovide scholarships to university and high schoolstudents in those countries.

Social Action Programs in Foreign Countries

Asahi Glass Scholarship Foundation

Asahi Glass Cup Aikawa Youth Baseball TournamentWorks of art on display at the Modern Glass Museum, Koganezaki Crystal Park

A large number of people were killed and injured with millions ofdollars in financial damage incurred by the people of manycountries due to the devastating earthquake that occurred offSumatra and the subsequent tsunamis on December 26, 2004.

Asahi Glass has long regarded India, Thailand and Indonesia tobe very important as core bases in our operations in Asia,where we have beenactive for over 30years. The AGCGroup wanted toreciprocate theirfr iendship andprovided support tohelp them recoveras soon as possible.

Support for Victims of theSumatra Earthquake andIndian Ocean Tsunami

C O L U M N

CSR Report 2005 55

The Asahi Glass Foundation strives to contribute to thecreation of a richer, more vibrant society. To this end, theFoundation supports research in leading-edge scientificand technological fields and recognizes individual andorganizational efforts to solve issues of concern to peoplearound the world.

Environment

The Asahi Glass Foundation

The Asahi Glass Foundation has awarded the Blue PlanetPrize since 1992. Its is an international environmentalaward given to individuals and organizations who havemade outstanding achievements in scientific research andits application, and in so doing have helped providesolutions to global environmental problems. Each year,two award recipients are chosen from among candidatesnamed by nominators from Japan and overseas. Eachwinner receives a certificate of merit, a trophy and asupplementary award of ¥50 million.

Areas for Recognition

13th (2004) Blue Planet Prize Winners

Dr. Gro Harlem Brundtland(Norway)

For putting forward globally theinnovative concept ofsustainable development, anidea that aims to balanceenvironmental conservation witheconomic growth

Dr. Susan Solomon (USA)

For pioneering work in identifyingthe mechanism that producesthe Antarctic ozone hole andmomentous contributionstowards the protection of theozone layer

• Environmental problems related to globalwarming, acid rain, ozone depletion,deforestation, desertification, soil deterioration,oceans and fresh water resources, preservationand restoration of the ecosystem andbiodiversity

• Comprehensive issues related to preservationand restoration of the global environment thatare useful in helping to realize a sustainablesociety, such as energy, population, food, waterresources and environmental policies

The Blue Planet Prize

The Asahi Glass Foundation provides grants to supportoriginal research in the natural and social sciences thatcould contribute to the future of society or providesolutions for important social issues. Particularly forresearch projects concerning the global environment,excellent projects in the natural sciences, humanities, andsocial sciences and in comprehensive fields are selectedfor support provided for each specific research. In fiscal2004, the Foundation provided assistance to 169 projectswith grants totaling ¥235 million.

Research Assistance Program

Assistance with research in the human and social sciences

Assistance with comprehensive research projects

Overseas research assistance

Environment, organizations, information, and humanity

Global environment

Chulalongkorn University (Thailand)Institute Technology Bandung (Indonesia)

Science and technology

Assistance with research in the natural sciences

Substances and materials, life sciences, information sciences and automatic control systems, the environment and energy

Research fields to be supported

Presentation on the results of research support held at United NationsUniversity U Thant Conference Center on July 21, 2004. Out of thosefinancially supported by the Foundation, five researchers on environmentalissues in the Asian area presented their results.

CSR Report 200556

GRI Content Index (2002)This table provides page references for individual indicators contained in the GRI Sustainability Reporting Guidelines.

Item Indicator Page ref.

6-9

This table provides page references for individual reporting indicators contained in the GRI Sustainability Reporting Guidelines.GRI Guidelines available at: http://www.globalreporting.org

Statement of the organization's vision and strategy regarding its contribution to sustainable development.

2. Profile

Organization Profile

Report Scope

Outline of Report

16Name of reporting organization

3. Governance Structure and Management Systems

4. GRI Content Index

5. Performance Indicators

■ Economic Performance Indicators

Structure and Governance

Overarching Policies and Management Systems

Customers

5Governance structure of the organization, including major committees under the board of directors that are responsible for setting strategy and for oversight of the organization

5, 23, 27Organizational structure and key individuals responsible for oversight, implementation, and audit of economic, environmental, social and related policies

6-9Mission and values statements, internally developed codes of conduct or principles, and polices relevant to economic, environmental, and social performance and the status of implementation

23-26, 42-43

Policies and/or systems for managing upstream and downstream impacts

28-29Programs and procedures pertaining to economic, environmental, and social performance

31, 51Status of certification pertaining to economic, environmental, and social management systems

16Net sales

56A table identifying location of each element of the GRI Report Content, by section and indicator

16Major products and/or services, including brands if appropriate

Back coverContact person(s) for the report, including email and web addresses

1Reporting period (e.g., fiscal/calendar year) for information provided

1Decisions not to apply GRI principles or protocols in the preparation of the report

5, 23, 27, 31Policies and internal practices to enhance and provide assurance about the accuracy, completeness, and reliability that can be placed on the sustainability report

57Policy and current practice with regard to providing independent assurance for the full report

1Means by which report users can obtain additional information and reports about economic, environmental, and social aspects of the organization's activities, including facility-specific information (if available)

1Significant changes in size, structure, ownership, or products/services that have occurred since the previous report

30Basic items to be reported (joint venture, subsidiary, leased equipment, outsourcing, etc.) that give a big impact on comparison in terms of time series or between reporting organizations

1Boundaries of report (countries/regions, products/services, divisions/facilities/joint ventures/subsidiaries) and any specific limitations on the scope

5, 16Operational structure of the organization

16, 47-50Description of major divisions, operating companies, subsidiaries, and joint ventures

6-9Statement from the CEO (or equivalent senior manager) describing key elements of the report.

16Countries in which the organization's operations are located

16Nature of ownership: legal form

16Scale of the reporting organization

17List of stakeholders, key attributes of each, and relationship to the reporting organization

1. Vision and Strategy

Item Indicator Page ref.Direct Effects

Core Indicators

Labor Practices and Decent Work

Public sector

16Geographic breakdown of markets

55Donations to community, civil society, and other groups broken down in terms of cash and in-kind donations per type of group

■ Environmental Performance Indicators

Energy

Water

30, 36-37Direct energy use segmented by primary source

30, 36-37Total water use

Emissions, Effluents, and Waste

12-13, 30, 37

Greenhouse gas emissions (CO2, CH4, N2O, HFCS, PFCS, SF6)

30, 37NOx, SOx, and other significant air emissions by type

30, 39-40Total amount of waste by type and destination

30, 37Significant discharges to water by type

Item Indicator Page ref.Core Indicators

■ Social Performance Indicators

Employment

20Breakdown of workforce

Health & Safety

52-53Practices on recording and notification of occupational health and diseases

53Standard injury, lost day, and absentee rates and member of work-related fatalities (including subcontracted workers)

20-22Description of equal opportunity policies or programs, as well as monitoring systems to ensure compliance and results of monitoring

20-22Composition of senior management and corporate governance bodies (including the board of directors), including female/male ratio and other indicators of diversity as culturally appropriate

Item Indicator Page ref.

Core Indicators

Human rights

Core indicators

Product Responsibility

Core Indicators

Employment

Health & Safety

Products & services

22Employee benefits beyond those legally mandated

52-53Evidence of substantial compliance with the ILO Guidelines for Occupational Health Management Systems

18-19Description of policy, procedures/management systems, and compliance mechanisms related to product information and labeling

Additional indicators

Products & services

18-19Description of reporting organizations policy, procedures/management systems and compliance mechanisms related to customer satisfaction, including results of surveys measuring customer satisfaction

Additional Indicators

Transport

42Significant environmental impacts of transportation used for logistical purposes

Overall

44-45Total environmental expenditures by type

Additional Indicators

1.1

2.1

3.1

3.6

3.7

3.16

3.19

3.20

EC1

4.1

2.2

2.10

2.11

2.17

2.20

2.21

2.22

2.14

2.15

2.13

2.3

2.4

1.2

2.5

2.6

2.8

2.9

EC2

EC10

EN3

EN5

EN8

EN10

EN11

EN12

LA1

LA5

LA7

LA10

LA11

LA12

LA14

PR2

PR8

EN34

EN35

Observer’s Opinion

Detailed Comparison with Persuasive PowerThis report is featured by concluding that CSR for the AGCGroup is to aim at “Look Beyond” based on a detailed reviewand discussion on whether the group vision “Look Beyond” andthe management policy “JIKKO” satisfy what society wants forCSR. These attempts sound persuasive and enable the readerto feel the enthusiasm and efforts of Asahi Glass related toCSR. Such impression can also affect how a corporate brandwill be formed. It is recommended in the future that theindicators of CSR be determined and that the progress of CSRbe continuously disclosed by means of this report.Compliance is one of the building blocks of a corporation. Aworking system must be established. This report is very good inthat the system actually works as evidenced by disclosure andself-evaluation of the results of reporting and consulting throughthe Help Line, the Code of Conduct and the guidelines onreporting information on violations, publication of a Q&A withCommentaries, and submission of the compliance certificates.

Ease of UnderstandingThe reader can feel the commitment and sincerity of AsahiGlass here and there in this report on disclosure of information.The door to the disclosure of environmental information isopening wider in recent years. It is important that Asahi Glassalso continue to keep the door to CSR information open in theyears to come. Note, however, that disclosed information mustbe understood by the general public. In this light, one cannotdeny that this report may appear to the reader to be highlyspecialized and difficult to get into because of its use of manyspecial terms and unintelligible catch phrases. It is necessary touse language that is easier to understand and to providedetailed descriptions for catch phrases and special terms(“make the world a brighter place” for instance).

Quantitative Targets Need to be IndicatedIt is highly significant for an environmental report to show notonly the input/output data but also a comparison withnationwide data. If each value is understood in relative termswith others, one can understand the degree of eachenvironmental impact in relative terms. A list of annual plans,results, evaluation and future plan may help us understand thePDCA cycle working, but because of insufficient indication of

quantitative targets and descriptions of each item in aqualitative manner, the reader may not feel how serious anddetermined Asahi Glass is about improvement activities. Take“Proper Management of Chemical Substances” for instance. Itis necessary to add descriptions of the entire picture, changes(in consumption or emissions), and the status of use of theyellow card system. The environmental data is only from theparent company of Asahi Glass, but since Asahi Glassannounced that their overseas sales exceeded 40% of the totaland that they are more serious about global operations as theAGC Group, the environmental data should be quickly shifted toshow consolidated data.

Reporting from Social ViewpointsThe reader understands how serious Asahi Glass is aboutdisclosing information on sociability. But it is recommended thatwhat topics to describe and what to describe for each topic bedetermined based on the trends in society and what people areconcerned about. For instance, the report does not providemuch information on labor, which is one of the topics with manyproblems to be solved for the benefit of society. For the topic of“diversity” listed as one of the shared values, a more detaileddescription about employment and promotion of women andthe employment environment related to the decreasing numberof children and the increasing number of aged people willhopefully be included in the future.For occupational health and safety, the report mentions theprogress of system development, such as the mid-termproblems to solve and expansion of OHSMS. But new seriousproblems are currently emerging in the workplace, such asdeterioration of mental health and a rising sickness ratio. It isconsidered necessary to describe how Asahi Glass copes withthese issues and the result of their effort on them.

Valdez Society *1 Yasunobu Okada/Kojiro Tanaka/Yoshiki Midorikawa/Tamio Yamaguchi

Our first CSR Report should be evaluated to verify that it clearly describes the ideas and policies of our CSR, reflectsthe characteristics and opinions of the company, and to verify that the descriptions of our CSR activities satisfy themain requirements of society and that the reader can understand the attitude of the entire AGC Group toward CSR.

*1 The Valdez Society is a Japanese NGO that was established in 1991 with the three aims of promoting corporate environmental management, socially responsible investmentand eco-conscious consumerism. It provides companies with contract research and consulting services on topics related to environmental and social responsibilities. It is theonly registered Japanese member of CERES (Coalition for Environmentally Responsible Economies), the originator of the Global Reporting Initiative (GRI).

CSR Report 2005 57

,p

Published in September 2005(Next publication scheduled for September 2006)We implement green purchasing

At least 30% of the fiber used in the manufacturing process of this product comes from well-managed forests independently certified according to the rules of the Forest Stewardship Council.

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